China's record-low yields flash deflationary warning signs
Sri Lanka, March 4 -- SHANGHAI -- China's benchmark yield has dropped to a record low amid deflationary pressures, signaling a heightened risk of the long-term economic stagnation that has plagued Japan.
The yield on China's 10-year government bonds briefly touched 2.341% on Thursday, according to the London Stock Exchange Group. This is the lowest reading in available LSEG data, dipping under the previous trough of 2.352% from June 5, 2002.
The yields rose Friday to close at around 2.38%.
The common thread between Thursday and 2002 is deflationary pressures. Back in 2002, state-owned Chinese banks were grappling with nonperforming loans, which led to depressed internal demand. As a result, the consumer price index was on decline.
Thi...
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