China's Bond Market Navigates New Territory Amid Historic Yield Lows
China's $11 trillion government bond market is witnessing unprecedented changes as it enters a new era of monetary policy. According to a Bloomberg report, this shift has sparked a debate on how much further yields can decline from their current record lows. Following a strong monetary easing commitment by China's Politburo, bond prices soared, driving the 10-year bond yield to a historic low of 1.77%, while longer-term yields fell sharply.
This downward trend in yields has led to concerns that China's 10-year bond yields could drop below those of Japan, which are around 1.04%. Such a scenario could disrupt the markets further. "Bond yields at 0% are a possibility," stated George Boubouras, head of research at hedge fund K2 Asset Management Ltd. Investors are looking at the ultra-loose monetary policies from other regions, such as the US, Switzerland, and the eurozone, for guidance, with the most common comparison being made with Japan and its negative interest rate policy aimed at economic recovery. This prevailing sentiment is echoed by Stephen Miller, a markets veteran at GSFM, who believes, "The Japanification of China bonds may be inevitable at some point."
Analysts from financial institutions like Tianfeng Securities, Zheshang Securities, and Standard Chartered Bank predict a continued downward trajectory for yields, estimating they could fall to between 1.5% and 1.6% by the end of the next year. Wall Street banks anticipate China's largest rate cuts in a decade, which could potentially exert further pressure on yields.
The pressure on yields highlights the changing fortunes of China's economy, which is still grappling with challenges such as a property market downturn, reduced consumer spending, and a prolonged period of near-zero inflation. Bloomberg data reveal a 0.78 percentage point decline in China's 10-year bond yields this year, the most significant annual drop since 2015.
Despite the decline in yields, the People's Bank of China (PBOC) remains focused on managing the yield curve. Lv Pin, chief fixed-income analyst at Topsperity Securities Co., notes that while the PBOC may cut rates further in the coming year, it is likely to continue interventions to control the yield curve.
The recent commitment from the Politburo to a "moderately loose" policy for 2025 signifies a pivotal shift in monetary stance, with measures including rate cuts and eased mortgage rules already underway. Investors are keen to see further stimulus as Beijing tackles challenges like potential US tariffs. "Beijing and the PBOC need to do a Mario Draghi exponentially," suggested Boubouras, referencing the European Central Bank's determined efforts to save the euro.
-
1. INTRODUCTION
Making Data-Driven Decisions to Grow Your Business
- REPORT DESCRIPTION
- RESEARCH METHODOLOGY AND AI PLATFORM
- DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
- GLOSSARY AND SPECIFIC TERMS
-
2. EXECUTIVE SUMMARY
A Quick Overview of Market Performance
- KEY FINDINGS
- MARKET TRENDS This Chapter is Available Only for the Professional Edition PRO
-
3. MARKET OVERVIEW
Understanding the Current State of The Market and Its Prospects
- MARKET SIZE
- CONSUMPTION BY COUNTRY
- MARKET FORECAST TO 2030
-
4. MOST PROMISING PRODUCT
Finding New Products to Diversify Your Business
This Chapter is Available Only for the Professional Edition PRO- TOP PRODUCTS TO DIVERSIFY YOUR BUSINESS
- BEST-SELLING PRODUCTS
- MOST CONSUMED PRODUCT
- MOST TRADED PRODUCT
- MOST PROFITABLE PRODUCT FOR EXPORT
-
5. MOST PROMISING SUPPLYING COUNTRIES
Choosing the Best Countries to Establish Your Sustainable Supply Chain
This Chapter is Available Only for the Professional Edition PRO- TOP COUNTRIES TO SOURCE YOUR PRODUCT
- TOP PRODUCING COUNTRIES
- TOP EXPORTING COUNTRIES
- LOW-COST EXPORTING COUNTRIES
-
6. MOST PROMISING OVERSEAS MARKETS
Choosing the Best Countries to Boost Your Exports
This Chapter is Available Only for the Professional Edition PRO- TOP OVERSEAS MARKETS FOR EXPORTING YOUR PRODUCT
- TOP CONSUMING MARKETS
- UNSATURATED MARKETS
- TOP IMPORTING MARKETS
- MOST PROFITABLE MARKETS
7. GLOBAL PRODUCTION
The Latest Trends and Insights into The Industry
- PRODUCTION VOLUME AND VALUE
- PRODUCTION BY COUNTRY
8. GLOBAL IMPORTS
The Largest Importers on The Market and How They Succeed
- IMPORTS FROM 2012–2024
- IMPORTS BY COUNTRY
- IMPORT PRICES BY COUNTRY
9. GLOBAL EXPORTS
The Largest Exporters on The Market and How They Succeed
- EXPORTS FROM 2012–2024
- EXPORTS BY COUNTRY
- EXPORT PRICES BY COUNTRY
-
10. PROFILES OF MAJOR PRODUCERS
The Largest Producers on The Market and Their Profiles
This Chapter is Available Only for the Professional Edition PRO -
11. COUNTRY PROFILES
The Largest Markets And Their Profiles
This Chapter is Available Only for the Professional Edition PRO- United States
- China
- Japan
- Germany
- United Kingdom
- France
- Brazil
- Italy
- Russian Federation
- India
- Canada
- Australia
- Republic of Korea
- Spain
- Mexico
- Indonesia
- Netherlands
- Turkey
- Saudi Arabia
- Switzerland
- Sweden
- Nigeria
- Poland
- Belgium
- Argentina
- Norway
- Austria
- Thailand
- United Arab Emirates
- Colombia
- Denmark
- South Africa
- Malaysia
- Israel
- Singapore
- Egypt
- Philippines
- Finland
- Chile
- Ireland
- Pakistan
- Greece
- Portugal
- Kazakhstan
- Algeria
- Czech Republic
- Qatar
- Peru
- Romania
- Vietnam
-
LIST OF TABLES
- Key Findings In 2024
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Per Capita Consumption, By Country, 2018–2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country Of Destination, 2012–2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, By Country Of Origin, 2012–2024
-
LIST OF FIGURES
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Consumption, By Country, 2024
- Market Volume Forecast to 2030
- Market Value Forecast to 2030
- Products: Market Size And Growth, By Type
- Products: Average Per Capita Consumption, By Type
- Products: Exports And Growth, By Type
- Products: Export Prices And Growth, By Type
- Production Volume And Growth
- Exports And Growth
- Export Prices And Growth
- Market Size And Growth
- Per Capita Consumption
- Imports And Growth
- Import Prices
- Production, In Physical Terms, 2012–2024
- Production, In Value Terms, 2012–2024
- Production, By Country, 2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, 2012–2024
- Imports, In Value Terms, 2012–2024
- Imports, In Physical Terms, By Country, 2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country, 2012–2024
- Exports, In Physical Terms, 2012–2024
- Exports, In Value Terms, 2012–2024
- Exports, In Physical Terms, By Country, 2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, 2012–2024