The spread between US and Chinese 10-year government bond yields widened to 317 basis points, or 3.17 percentage points, the largest gap since 2002. The US 10-year Treasury yield rose to 4.85%, its highest level since 2023, while China’s 10-year government bond yield held at 1.68%. Analysts said the wider differential is reducing the appeal of onshore Chinese assets for domestic and international investors, increasing the risk of capital outflows and renminbi depreciation. The currency has recently remained near its strongest levels against the dollar in years, supported by solid exports, but divergent monetary policies could unsettle that trend. The People’s Bank of China is focused on supporting growth, while the Federal Reserve is reinforcing its tightening stance to curb inflation. Global sovereign bond yields have also climbed to their highest levels since 2007; Bloomberg’s global sovereign bond gauge reached 3.8% this week, while yields in Japan and the UK have also risen.