Money is rushing into Chinese government bonds, sending their prices soaring and yields plunging to record lows as investors hunt for a safer alternative to the country’s ravaged real estate market and volatile stocks. The yield on China’s onshore 10-year government bond, which is a benchmark for a wide range of interest rates, touched 2.18% Monday, the lowest since 2002 when records began. Yields on 20-year and 30-year bonds are also hovering around historic lows.
55 trillion yuan , up 61% from the same period last year, according to an analysis of central bank data by Zheshang Securities, a state-controlled brokerage firm. Official interest rates in China are low after cuts in recent years by the PBOC aimed at supporting the economy. Deflationary pressures have persisted — consumer prices rose less than expected in May and factory prices declined for the 20th month in a row.