China’s long-end yields hit mid-2025 low as stimulus bets rise
China’s long-end yields fell to the lowest level since July 2025, with the 10-year China Government Bond (CGB) yield dropping to 1.67% on Aug 18, 2026. The move reflects weak macro data and rising expectations of further Beijing stimulus. Over the past month it fell 7 bps, and it is 11 bps lower than a year ago.
The selloff in China’s long-end yields contrasts with the US 10-year Treasury around 4.72%, leaving a wide ~305 bps gap between the two largest economies. The trigger was a July data slowdown: industrial production, retail sales, and fixed-asset investment all missed consensus.
Premier Li Qiang’s comments highlighted the need for stronger policy support. The People’s Bank of China acted Aug 15 via a 349 billion yuan ($51.7B) overnight reverse repo injection. Rates also show policy stress: the 30-year CGB yield hovered near 2.15%, while the 10-year vs 2-year spread compressed to about 44 bps.
Next catalyst: the National People’s Congress Standing Committee session on Aug 25–28. Markets are pricing additional fiscal or monetary measures. However, the persistent China–US long-rate spread can weigh on the yuan, complicating the PBoC’s trade-off between growth support and currency stability.
Neutral
China’s long-end yields falling to a mid-2025 low signals easing financial conditions and stronger probability of additional policy support. For crypto, this can be sentiment-supportive in the near term, similar to past episodes where stimulus expectations improved risk appetite and tightened the “liquidity fear” narrative.
However, the article highlights a persistent ~305 bps China–US long-rate gap, which typically weighs on the yuan. Currency weakness can complicate global risk flows and may lead traders to price higher FX/EM risks, partially offsetting the growth-positive effect. The compressed 10Y–2Y spread also suggests the market is already discounting slower growth and policy responsiveness.
Net impact: neutral. Short-term, traders may react to “more stimulus = better liquidity” in risk assets. Medium-term, FX sensitivity and US-rate divergence can keep volatility elevated and prevent a clean, sustained risk rally across BTC/ETH and broader crypto until policy details from the Aug 25–28 NPC session are confirmed.