Analysis: U.S. Treasury Yields’ Declining Influence on Chinese Stocks

From early 2021, the performance of the Chinese mainland stock market showed a strong negative correlation with the 10-year U.S. Treasury yield. Many see that as a result of the increasing influence of foreign capital in the market.

However, from last November to this January, despite the U.S. Treasury yield sliding from about 4.6% to below 4%, that failed to translate into any positive impact on the liquidity of the Chinese stock market. Since February, the U.S. Treasury yield has returned to above 4.5%, but the Chinese market has experienced a sharp rebound.