China 10Y Yield Hovers Near 2-Month Low

China’s 10-year government bond yield rose to around 1.81% on Friday, rebounding from a decline in the previous session as investors weighed new US trade probes targeting several countries, including China. Launched under Section 301(b) of the Trade Act of 1974, the investigations examine whether policies related to forced labor are “unreasonable or discriminatory” and whether they burden US commerce. This follows a similar probe on Wednesday, which could allow the president to impose trade penalties on countries found to engage in unfair trade practices. The latest investigations added strain to already complicated US–China relations ahead of a high-stakes summit in Beijing. Market sentiment was further dampened by escalating Middle East tensions, which raised concerns over rising energy prices and prompted several central banks to signal a hawkish stance. Still, China remains relatively well positioned to handle supply shocks.

China’s 10-year government bond yield rose toward 1.82% on Thursday, following a steady performance in the previous session, as investors grew cautious amid renewed US–China trade tensions. The US administration has launched a probe under Section 301 of the Trade Act of 1974 into several economies, including China, a mechanism that allows the president to impose tariffs on countries found to engage in unfair trade practices without congressional approval. The investigation raises the prospect of new tariffs, echoing previous reciprocal measures that were recently struck down by the Supreme Court. The move adds another layer of complexity to US–China relations and threatens a fragile trade truce between the world’s two largest economies ahead of a high-stakes summit in Beijing. China kicked off the year with robust trade data, as exports surged 21.8% year-on-year to $656.6 billion in January–February 2026, and imports rose 19.8% to $443 billion.

China’s 10-year government bond yield rose toward 1.82% on Thursday after a steady performance in the previous session, as investors weighed uncertainties surrounding the Middle East conflict. Iraq recently halted operations at its oil terminals after two tankers were attacked in Iraqi waters, raising concerns over regional oil supply. Still, China remains relatively well positioned to weather potential supply shocks after years of prioritizing energy security. Meanwhile, robust trade data helped ease subdued market sentiment, with China’s exports surging 21.8% year-on-year to $656.6 billion in January–February 2026, while imports soared 19.8% to $443 billion. However, this momentum could face headwinds as the Trump administration launches Section 301 investigations to replace reciprocal tariffs recently struck down by the Supreme Court. The move allows the US to target imports from countries deemed to engage in unfair trade practices.