China’s 10-year government bond yield fell to around 1.85% on Wednesday, following the release of PMI figures. Official data showed the composite PMI hit a six-month high of 50.7 in December 2025, with the manufacturing PMI returning to positive territory (50.1 vs 49.2 in November) and the non-manufacturing PMI unexpectedly climbing to a five-month peak (50.2 vs 49.5). A private-sector survey mirrored this upbeat trend, with the manufacturing PMI rising to 50.1 from 49.9 in November. Investors also welcomed China’s renewed policy support for domestic consumption. The finance ministry said fiscal policy will be “more proactive” in 2026, focusing on technology, human capital, and the social safety net to boost domestic demand. The announcement fueled expectations of increased government borrowing, which analysts say could push long-term yields higher. China’s 10-year government bond yield is set to break a two-year streak of declines, having roughly climbed 10.4% this year.