In 1H 2026 China’s bond market staged a slow, choppy rally as the PBOC kept a
modestly accomodative stance, liquidity remained ample, domestic demand stayed
weak and a continued “asset shortage” supported falling yields and compressed
credit spreads. Government bond yields peaked near 1.90% for the 10‑year in
early January and then eased; at end‑June the 1‑yr and 10‑yr government yields
stood at about 1.12% and 1.73%, down roughly 22bp and 11bp year‑to‑date. On the
credit side, AAA 3‑yr and 5‑yr local government financing vehicle yields fell
about 24bp and 21bp YTD; AA names declined by more. Wealth management firms had
14,922 active publicly offered pure fixed-income products as of June 30, 2026.
Over the past six months 82% of these posted net asset value gains below 1.5%
(annualized
