FX.co ★ China 10Y Yield Rebounds Amid Upbeat Trade Data

China's 10-year government bond yield increased to approximately 1.86%, bouncing back from a two-week low observed in the prior session. This uptick is attributed to strong external demand, which may potentially underpin enhanced economic activity. In December 2025, exports surged by 6.6% year-on-year, reaching an unprecedented USD 357.8 billion, while imports climbed 5.7% to a nearly four-year peak of USD 243.64 billion. Throughout 2025, China achieved a trade surplus of $1.2 trillion, with exports serving as the principal growth driver. This robust external performance has effectively mitigated the impact of weaker domestic consumption, which has been hampered by an extended property downturn and tepid investment levels. Looking toward 2026, sustained global demand and China's export competitive edge are anticipated to continue bolstering the economy, assuming the trade agreement with the US remains stable. Nevertheless, risks loom on the horizon following US President Trump's recent declaration of new tariffs on nations engaged in trade with Iran, potentially ushering in new uncertainties within global trade dynamics.