China’s 10-year government bond yield dropped to around 1.83% on Monday, hitting a fresh three-week low, as investors assessed China’s latest economic figures. The country’s economic growth expanded by 4.5% year-on-year in the fourth quarter, the weakest pace in nearly three years. However, full-year growth reached 5%, in line with Beijing’s target, supported by a record trade surplus as strong exports to non-US markets offset pressure from US tariffs. Separate December data showed industrial output exceeded expectations, while retail sales and fixed asset investment fell short. Meanwhile, the central bank announced last week sector-specific rate cuts to provide an early boost to the economy and signaled room for further reserve requirement and broader rate cuts this year, putting downward pressure on yields. Global risk appetite also weakened after US President Donald Trump threatened tariffs on eight European countries over Greenland.
