China’s 10-year government bond yield dropped to around 1.72% on Wednesday, hitting its lowest level since August 2025, as strong liquidity outweighed concerns about rising debt supply. The People’s Bank of China has kept conditions loose to support the economy, with overnight borrowing rate hovering near their lowest levels since 2023, even as Beijing prepares a record 30-year bond sale under its ultra-long sovereign program on Friday. Chinese government debt is increasingly seen as a safe-haven amid global uncertainty, particularly energy-market volatility tied to the Middle East conflict. Meanwhile, Indonesia will allow China to issue sovereign bonds in its domestic market on a reciprocal basis, advancing regional financial integration. The arrangement follows talks between Purbaya and Chinese Finance Minister Lan Fo’an at the IMF-World Bank Spring Meetings, where cross-border bond issuance was a key topic.
