By Li Gu and Vidya Ranganathan

SHANGHAI/SINGAPORE (Reuters) -Bond traders in China are facing their toughest conditions in at least a decade, as low interest rates and meagre price swings push fund managers to chase yield in alternative debt markets.

A languid economy and no changes in monetary policy have ground China’s multi-year debt market rally to a halt this year.

That shift has left traders with a market that has very little to offer in terms of arbitrage or returns amid intensifying competition – even as they scramble to deliver on elevated performance targets.

Benchmark 10-year government bond yields have spent this year in a 1.6% to 1.9% range, with no discernible trend and subdued volatility for most of the time.

“This year the tide’s gone flat. No trend for allocators to f

See Full Page