[bond market] China bond yield still at attractive level after narrowing premium vs Treasuries

For all the fears around a short term sell off in the Chinese government bonds market, those haven't materialized. 

In fact, the Chinese government 10 year bond yield has been stabilizing around 315bps to 320bps at the current level, illustrating the adequate liquidity in the market. 

Source: Bloomberg

As for the spread between the Chinese government 10year bond yield and US Treasuries 10 year yield, the gap has arrowed by nearly 100bps since the beginning of the year, driven by the rising inflation expectation in the US. Still, from an asset allocation perspective, the ~150bps yield premium in the China 10-year bond (vs 10 year Treasuries) is sitting at an attractive relative to the historical range.