China’s central bank rejects Western claims that the yuan is undervalued, saying exchange-rate moves cannot solve broader trade imbalances as China begins trade-related talks with the European Union. The People’s Bank of China argues that structural issues in the global economy drive imbalances and that currency adjustments are not an appropriate fix.
In Beijing, the central bank also states China has no need or intention to weaken the yuan for competitive advantage and has never carried out “competitive” currency devaluation. The comments come as EU officials and other leaders have increasingly linked parts of the bloc’s trade deficit with China to the exchange rate. Reports note that the yuan has strengthened against the US dollar this year despite interest-rate differentials between US and Chinese government bonds. The EU’s concerns are reflected in its large and growing trade imbalance figure reported for 2025.
Across outlets, the dispute is framed as a response to EU pressure over trade gaps, with China emphasizing market-determined exchange rates and the limits of currency policy in addressing underlying economic imbalances.
