China’s 10-year government bond yield fell to around 1.84%, marking a near three-week low, reflecting persistent investor caution despite strong external demand that could support economic growth. Exports grew 6.6% year-on-year to a record USD 357.8 billion in December 2025, while imports rose 5.7% to a near four-year high of USD 243.64 billion. For the full year of 2025, China’s trade surplus reached $1.2 trillion, with exports remaining the primary engine of growth. This strong external performance has helped offset softer domestic consumption, which has been weighed down by a prolonged property slump and subdued investment. Looking ahead to 2026, global demand and China’s export competitiveness are expected to continue supporting the economy, assuming the trade truce with the US remains intact. However, risks persist following US President Trump’s recent announcement of new tariffs on countries trading with Iran, which could create fresh uncertainties in global trade flows.
