China’s 10-year government bond yield fell to around 1.72% on Thursday, extending losses for a third consecutive session and hitting a more than one-week low, as the growing role of bond financing could support the People’s Bank of China’s efforts to lower borrowing costs. The shift toward bond issuance reflects China’s ongoing transition to a high-tech, innovation-driven economy, where capital market funding often offers cheaper financing than traditional bank loans. Government and corporate debt accounted for a record 30% of China’s outstanding credit stock in May. Meanwhile, the People’s Bank of China has been supporting liquidity conditions in the 200 trillion yuan bond market through policy operations, helping to keep yields low and ease funding costs across the economy. Separately, investors are closely watching the final session of the Lujiazui Forum for further policy signals and potential support measures.

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