China Keeps Borrowing Costs Low to Fuel Infrastructure Boom

China's Ministry of Finance recently auctioned off 10-year government bonds at a yield of 1.7116%, which is roughly equivalent to the US 10-year Treasury rate during the pandemic in 2020. This low yield is not an anomaly, but rather part of Beijing's deliberate policy to keep borrowing costs suppressed.

The yield on China's benchmark 10-year sovereign debt has been hovering around 1.73% as of mid-June 2026, matching secondary market levels. The People's Bank of China is keeping borrowing costs low to support the economy, which still requires significant fiscal assistance.

China's sovereign bond issuance reached record levels in early 2026, with plans for over 500 billion yuan ($69 billion) in auctions. The Ministry of Finance has been particularly aggressive in issuing ultra-long maturities, including 20-year, 30-year, and even 50-year special treasury bonds. These bonds are typically issued to fund generational infrastructure projects at cheap rates.

With yields this low, the government has every incentive to continue borrowing and investing in infrastructure projects. The low yields have not yet had an observable impact on the crypto market, with traders viewing it as a traditional finance event due to China's restrictions on cryptocurrency trading.