Chinese government bonds have become a rare safe haven during the Iran war, outperforming global peers as yields on the 10-year Chinese government bond dipped to 1.81% since February, contrasting sharply with surging US Treasury yields to 4.34%. This resilience stems from China's diversified energy mix, including coal and renewables, insulating it from energy price shocks that hit Europe and Asia. Capital controls also trap domestic demand, shielding the market from global sell-offs. JPMorgan's Jason Pang notes it offers investors an uncorrelated option.

While yields fell from over 4.7% in 2014, the recent rally prompted PBoC warnings about stability risks.