FX.co ★ China 10Y Yield Trades Near Historic Low

China’s benchmark 10-year government bond yield hovered near historic lows at around 1.59%, underscoring how strongly the economy continues to rely on external trade to support growth. In October, exports surged 35.2% year-on-year to $412.33 billion, driven by sustained global demand for AI-related technology equipment. Imports rose even more sharply, leaping 41.6% to $307.05 billion, the fastest increase in more than five years. As a result, China’s year-to-date trade surplus has exceeded $1 trillion for only the second time on record, putting the country on track to surpass last year’s record $1.2 trillion surplus. However, the widening gap between booming exports and weak consumer spending remains a concern, leaving overall economic growth heavily skewed toward external demand. Meanwhile, the latest inflation data point to ongoing upstream cost pressures and lackluster domestic demand, as rising input costs have yet to be fully passed on to consumers.