Citigroup Inc. advises investors to buy 30-year Chinese government bonds, citing lingering economic weakness and tapering supply of longer-term debt. Citi entered a long position at 2.088% with a yield target of 1.80%. Analysts Wenhan Chen and Rohit Garg note that weak domestic demand and subdued credit creation support duration demand.

The bank sees China's bond market decoupling from global fixed-income selloffs driven by persistent inflation. Citi highlights that China has issued roughly 90% of its planned 1.3 trillion yuan ($194 billion) in ultra-long special treasury bonds for 2026, with remaining issuance likely wrapping up in October. Beijing's 360 billion yuan recapitalization plan for major financial institutions is also expected to boost demand for longer tenor bonds.

Citi projects 10-year yields grinding lower toward 1.60% due to weak credit demand, while ongoing central bank bond purchases provide structural support. The yield on the 10-year tenor was around 1.67% on Monday. Citi expects the yield spread between 10- and 30-year notes to reverse from its current wide position relative to its three-year moving average.