The second-biggest bond market in the world, China's, is tense after a wild week of central bank and bond market conflict despite the country's faltering economy.

However, ardent investors argue that the bond market volatility in China was not as high as predicted, pointing to the shaky Chinese economy, deflationary pressures, and a lack of appetite for riskier assets among investors.

Bond fund managers declared that they were still aggressively positive despite the government's unprecedented attempts to calm the raging treasury market and stop a decline in yields, which are inversely correlated with prices.

Even those who have become pessimistic seem hesitant. Investor Wang Hongfei in Treasury futures remarked that when the market battles with regulators get more intense, he decides to be "opportunistic" in the short term by trading swiftly in skirmishes.

As investors flee volatile stocks and a collapsing real estate market in favor of government bonds and banks lower deposit rates, China's central bank has issued repeated warnings about potentially destabilizing bubble risks. Declining interest rates further impede the People's Bank of China's (PBOC) attempts to stabilize the declining value of the yuan.

However, the authorities have launched a new front in the war of attrition against speculators and unwanted price movements in the nation's stock and currency markets, with the PBOC now putting warnings into action to calm bond bulls.

According to Ryan Yonk, an economist from the American Institute for Economic Research, the Chinese bond market news was not surprising as a top-down regulation governed China's financial markets, particularly the bond market, in contrast to the West.

The economy's collapse will make it harder for Chinese officials to maintain such strictly regulated financial markets, and more interventions are expected. These could indicate the very instability that Chinese officials are trying to prevent.