(Bloomberg) — China’s government bonds extended an advance, sending benchmark yields to a record low, as traders piled into the securities despite the authorities’ pushback against the rally.

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The yield on the most actively traded 10-year sovereign notes slid to 2.075%, a level unseen since official record became available in 2002. The move came even as state banks were seen becoming more active in selling long-dated bonds in the secondary market in recent days, a sign the People’s Bank of China may have intervened to cool the rally.

The development underscores a wide difference between where traders and Chinese policymakers want government yields to be. While the former only want to get their hands on the safest assets amid a moribund economy and prolonged property crisis, the latter is concerned that a burst of a liquidity-fueled bubble can jeopardize financial stability.

Traders have been on tenterhooks since last month, when Beijing’s pushback against the blistering bond rally evolved from verbal warnings to direct intervention. The Shanghai Securities News on Monday said debt selling by the PBOC will likely continue and the authorities will want to stem the bond rally.

“China’s macro challenges have not improved much, and investors expect domestic interest rates to go down further,” said Gary Ng, senior economist at Natixis. “Without a reversal of risk appetite, money will only continue to flow into bond markets. The current size of the intervention is not enough to deter such market forces.”

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