A record-breaking crash in Chinese bond yields has economists worried that a deflationary spiral may engulf Australia’s key commodities export market and extend a horror run of price falls for mining companies.

The benchmark Chinese government 10-year bond yield hit a record low of 2.10 per cent this week before recovering slightly to 2.19 per cent on Wednesday, with yields on longer-term 30-year government bonds falling to record lows of 2.33 per cent.