China’s bond yields have fallen to record lows, with the 10-year bond yield dropping to 2.13% and the 30-year note yield to 2.37%, despite repeated warnings from the People’s Bank of China (PBoC) about a potential bubble in the sovereign bond market. Investors are responding to deflationary pressures and weak economic indicators in China, including slowing growth, declining manufacturing activity, and near-zero inflation. The PBoC is struggling to convince traders that the market is overheating and has indicated its readiness to intervene, but investors continue to bet on further yield declines as they anticipate more economic stimulus measures.