China 10Y Yield Hits 3-Week Low

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.

China’s 10-year government bond yield edged lower to around 1.75% on Friday, extending a modest decline from the previous session as investors positioned ahead of Trump–Xi summit next week. The two leaders are expected to meet in Beijing on May 14–15, which was previously postponed due to heightened tensions linked to the Middle East conflict. In a fresh escalation in the region, three US Navy destroyers transiting the Strait of Hormuz reportedly intercepted Iranian attacks and conducted retaliatory strikes. Uncertainty still surrounds the visit, with reports suggesting Beijing remains cautious about moving forward while the US–Iran standoff shows no clear signs of de-escalation. Separately, China’s financial regulators have reportedly instructed major banks to halt new financing for five US-sanctioned refineries over alleged Iranian oil ties—marking a notable shift from earlier guidance that encouraged lenders to disregard US sanctions.