A rally in China’s government bonds prompted by the deadly coronavirus outbreak has rewarded big US and European investors that have bet on a slowdown in the world’s second-biggest economy.

Chinese bond yields have fallen to four-year lows as investors turn to the safety of sovereign debt because of the spread of the disease, known as Covid-19. Investors are expecting Beijing to unleash more stimulus as it seeks to cushion the economic blow from the epidemic.

China’s 10-year Treasury yields, which fall as prices rise, have sunk more than 25 basis points to 2.87 per cent since the start of the year. That rally accelerated in late January as Chinese authorities ordered businesses to shut, stoking fears of a sharp economic slowdown. Yields have not been below 3 per cent since 2016.