China’s 10-year government bond yield rose to around 1.79% on Thursday, rebounding from a near three-week low earlier this week, as investors weighed the country’s revised GDP growth goal. The Chinese government set a GDP growth goal of roughly 4.5% to 5% for 2026, its most restrained target since 1991. The modest projection signals policymakers’ growing willingness to tolerate slower growth while steering the economy toward more sustainable drivers, reducing reliance on debt-fueled property and infrastructure investment. It also reflects Beijing’s recognition that the growth model that fueled four decades of rapid expansion is facing mounting structural pressures. Meanwhile, the budget deficit will remain at around 4% of GDP, unchanged from 2025 to support growth amid domestic challenges and rising geopolitical risks. Fiscal policy is expected to lead efforts to spur the economy, as shrinking bank profit margins and subdued demand for credit limit the scope for monetary easing.
