"China’s government bond market has opened 2025 with a clear warning for policymakers: without more determined stimulus, investors expect deflationary pressures to become even more entrenched in the world’s second-largest economy.
China’s 10-year bond yield, a benchmark for economic growth and inflation expectations, fell to a record low of less than 1.6 per cent during trading last week and has since hovered close to that level.
Crucially, the whole yield curve has shifted downwards rather than steepening, suggesting investors are alarmed about the long-term outlook and not just anticipating short-term cuts to interest rates.
“For the long-term [bonds], yields have been trending down and I think that’s more about longer-term growth expectations and inflation expectations becoming more pessimistic. And I think that trend is likely to continue,” said Hui Shan, chief China economist at Goldman Sachs."
https://www.ft.com/content/6fe07039-eb7d-47d9-8e97-e933bab0085a
#China #Economy #Deflation #PoliticalEconomy
China’s 10-year bond yield, a benchmark for economic growth and inflation expectations, fell to a record low of less than 1.6 per cent during trading last week and has since hovered close to that level.
Crucially, the whole yield curve has shifted downwards rather than steepening, suggesting investors are alarmed about the long-term outlook and not just anticipating short-term cuts to interest rates.
“For the long-term [bonds], yields have been trending down and I think that’s more about longer-term growth expectations and inflation expectations becoming more pessimistic. And I think that trend is likely to continue,” said Hui Shan, chief China economist at Goldman Sachs."
https://www.ft.com/content/6fe07039-eb7d-47d9-8e97-e933bab0085a
#China #Economy #Deflation #PoliticalEconomy
Falling Chinese bond yields signal concern with deflation
Investors expect price pressures to become entrenched in world’s second-largest economyArjun Neil Alim (Financial Times)
