Moving Pieces: Falling China bond yields signal further troubles ahead

What does 2025 have in store for the Chinese economy?

Moving pieces is a new series where I break down big-picture news and how it relates to global and national security. While not as thrilling as war and conflict, these factors are essential in understanding the drivers behind them.

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China's government bond yields have fallen to their lowest levels on record. The two-year yield is now just 1%, compared to 1.5% just a few months ago. The ten-year yield is now at an all-time low of 1.6%. These downturns come as the country's central bank, the People's Bank of China (PBoC), temporarily stopped bond purchases to drive down yields, citing excess demand.

This downturn may be the beginning of serious trouble for the Chinese economy in 2025, with serious global implications.