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Citi Recommends Buying China's 30-Year Bonds Amidst Economic Weakness
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CNBC TV18•29-09-2026, 06:35
Citi Recommends Buying China's 30-Year Bonds Amidst Economic Weakness
- •Citigroup Inc. advises investors to acquire 30-year Chinese government bonds, anticipating increased demand due to persistent economic weakness and limited availability of extended-maturity debt.
- •Citi has established a long position in 30-year Chinese government bonds at a 2.088% yield, targeting 1.80%, while current yields are near 2.1%.
- •China's bond market is diverging from global trends, with subdued credit expansion and weak domestic consumption keeping yields low, contrasting with rising yields in developed economies.
- •China has issued approximately 90% of its 1.3 trillion yuan ultra-long special treasury bonds for 2026, with the remainder expected by October.
- •Citi projects China's 10-year yields will decline to 1.60% due to constrained credit demand and continuous central bank bond acquisitions, while the yield differential between 10- and 30-year securities is expected to narrow.
Key Questions Answered
Citigroup recommends acquiring 30-year Chinese government bonds due to persistent economic weakness, subdued credit expansion, weak domestic consumption, and the diminishing availability of extended-maturity debt.
Citi has established a long position in 30-year Chinese government bonds at a yield of 2.088% and has set a target yield of 1.80%.
China has already distributed approximately 90% of its intended 1.3 trillion yuan in ultra-long special treasury bonds scheduled for 2026, with the remaining balance expected to conclude in October.
