China 10Y Yield Approaches 7-Week Low

China’s 10-year government bond yield fell to 1.75% on Friday, reversing the previous session’s gains and hitting its lowest level in more than two weeks, supported by optimism surrounding the high-stakes Trump–Xi meeting. The two leaders opened a second day of talks at Zhongnanhai, a rare and symbolic venue seen as more intimate than the Great Hall of the People. Trump said “a lot of good” had come from the visit and claimed the two sides had reached “fantastic trade deals,” while Xi said both countries had agreed to stabilize trade ties, expand cooperation, and manage differences constructively. Key outcomes included China’s expected purchase of 200 Boeing aircraft and “double-digit billions” of dollars in US agricultural imports over the next three years. Meanwhile, Trump said Washington and Beijing shared similar views on ending the conflict and keeping the Strait of Hormuz open, while China’s foreign minister called for safeguarding the critical maritime corridor.

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.