China 10Y Yield Falls After Inflation Data

China’s 10-year government bond yield rose above 1.75%, rebounding from a three-week low hit in the prior session, with investors adopting a cautious stance as the meeting between Presidents Donald Trump and Xi Jinping began. Taiwan has quickly become the most delicate issue in the Trump–Xi talks, with Xi warning that any mishandling of the matter could increase the risk of confrontation. Beyond Taiwan, the two leaders also exchanged views on a range of major international and regional crises, including tensions in the Middle East, the war in Ukraine, and developments on the Korean Peninsula. Xi also met with prominent U.S. business executives, pledging that China would continue opening its economy while presenting a vision for more stable and predictable ties with Washington. Expectations for the high-stakes summit have been subdued, with investors largely hoping the two sides will deliver just enough progress to preserve a fragile relationship that has helped support Chinese assets.

China’s 10-year government bond yield dropped to around 1.74% on Wednesday, hitting its lowest level in three weeks as investors geared up for the closely watched summit between US President Donald Trump and Chinese President Xi Jinping. The two-day meeting between the leaders is expected to cover a wide-ranging agenda, including trade relations, tariffs, artificial intelligence, Taiwan, and the ongoing conflict in the Middle East. However, Trump has signaled that his primary focus will be trade issues, suggesting that the Iran-related conflict is unlikely to feature prominently in the discussions. Investors are also watching for progress on a potential extension of the current trade truce, as tariffs remain a key source of friction between Washington and Beijing. China has consistently criticised US trade measures, while the Trump administration continues to pursue investigations into China’s trade practices.

China’s 10-year government bond yield slipped to around 1.75% on Tuesday, approaching its lowest level in two weeks, as stronger-than-expected trade data reinforced confidence in the economy ahead of a closely watched Trump–Xi meeting. Exports jumped 14.1% year-on-year to a record USD 359.44 billion in April 2026, beating market forecasts and markedly rising from March, supported by robust global demand tied to the AI investment boom, which helped offset disruptions from the closure of the Strait of Hormuz. Imports also climbed 25.3% to a new record high of USD 274.62 billion. Meanwhile, annual CPI came in above forecasts at 1.2% in April, while PPI rose for a second straight month to 2.8%. Market attention is now turning to the Trump-Xi meeting in Beijing later this week, where the two leaders are expected to discuss the Middle East conflict, Taiwan, and a potential framework for renewed trade negotiations between the world’s two largest economies.