China’s 10-year government bond yield slipped to around 1.67% on Thursday, hovering near its lowest level since July 2025, even as uncertainty persisted over the extension of the US-China trade truce. US Treasury Secretary Scott Bessent said Washington and Beijing had agreed to prolong the truce by two months, through January 10. Beijing, however, has yet to publicly confirm that expiry date, and the extension is shorter than the three-to-six-month period previously floated by some US officials.
The drop in Chinese yields came in contrast to a broad global bond selloff, driven by stronger-than-expected US economic data and tepid demand at a US Treasury auction, which pushed yields across much of the US curve to their highest levels in nearly 20 years. As a result, the yield premium of 10-year US Treasuries over Chinese government bonds remained close to a record high.
