【China's long-term interest rates fall below Japan for the first time】Data from UK LSEG shows that Japan's 10-year government bond yield rose to as high as 1.84% last week. China, on the other hand, has remained around 1.83%, at a historic low. China is facing deflationary pressures, and the reversal of long-term interest rates between China and Japan suggests that China's economy may be heading down the same path as Japan...

According to a report by Ta Kung Pao on November 22, 2025, the yield spread between China and Japan on 10-year government bonds has narrowed to about 3 basis points (China at 1.82%, Japan at 1.79%), setting a historical low. Insufficient demand is the core issue. China's leading economic index (LEI) has declined for six consecutive months, with weak consumer confidence being the main drag. At the same time, growth in fixed asset investment and retail sales of consumer goods also shows weakness. This indicates that the internal driving force of the economy needs to be strengthened, which is similar to Japan's "balance sheet recession" of the past, where the private sector was unwilling to borrow and consume.

The key difference is that China still has policy space and transformation potential. The decline in China's government bond yields partly reflects global capital viewing it as a safe-haven asset and a choice for portfolio diversification. In addition, China's efforts in financial reform and industrial upgrading (such as hard technology) represent new growth potential that Japan did not have at that time.

Simplistically equating the "inversion of long-term interest rates between China and Japan" with "China's economic Japanization" may be too one-sided.

Short-term, this indeed reflects China's weak domestic demand, and there are indeed risks.

But in the medium to long term, this more reflects the asset reallocation under the "east stable and west volatile" global market structure. China's core task is to stimulate domestic demand through effective policy measures and avoid falling into a true deflation spiral. (Material sourced from the internet, for reference only)

Original: www.toutiao.com/article/1849967540927500/

Statement: The article represents the views of the author himself.