Investors are piling into Chinese government bonds like it’s a fire sale on safety. A key measure of demand at China’s benchmark 10-year sovereign bond auction touched an all-time high on Wednesday, signaling that appetite for these securities has never been stronger.
With yields sitting in the 1.71% to 1.74% range, that demand is remarkable. Buyers are essentially locking in returns well below 2% for a decade, which tells you everything about where the smart money thinks China’s economy is heading.
What’s driving the rush
China’s Ministry of Finance has been issuing sovereign debt at a blistering pace. Record issuance volumes in early 2026 exceeded 522 billion yuan, roughly $74 billion, as part of the government’s broader fiscal stimulus push. Normally, flooding the market with supply pushes prices down and yields up. Here, the opposite happened.
The People’s Bank of China has been actively managing the curve, conducting net bond purchases of 10 billion yuan in June alone.
