China’s 10-year government bond yield fell to around 1.80% on Tuesday, hitting its lowest level in nearly a month, as unexpectedly strong PMI data highlighted the resilience of the world’s second-largest economy amid ongoing Middle East tensions. Official figures showed the composite PMI rising to a three-month high of 50.5 in March 2026, signaling renewed growth across both sub-sectors.
The manufacturing PMI climbed to a one-year high of 50.4, while the non-manufacturing PMI increased to 50.1, supported by government stimulus measures, robust holiday spending, and strong exports despite persistent global supply chain disruptions and volatility in the energy markets. However, although Chinese policymakers have frequently underscored the importance of boosting domestic consumption while curbing reliance on foreign demand, external headwinds, particularly the ongoing Middle East conflict could weigh on business activity in the coming months.
