China has no need or intention to weaken yuan for trade edge, central bank says
The People's Bank of China said it has no need or intention to devalue the yuan for trade advantage, rejecting EU criticism. It stressed market-determined exchange rates and announced additional forex data reporting to the IMF from 2027.
The People's Bank of China (PBOC) said on Thursday it has no need or intention to use yuan depreciation for a trade competitive advantage and has never engaged in competitive currency devaluation, rejecting criticisms from western trading partners including the European Union.
The central bank's remarks push back against claims that China keeps its currency undervalued to make its exports cheaper and imported goods pricier. They were issued as the EU's trade chief Maros Sefcovic was in Beijing to discuss narrowing the bloc's trade deficit with China.
China's yuan has strengthened about 4 per cent against the US dollar so far this year, defying the drag from a widening yield gap between US and Chinese government bonds.
In a June speech, European Central Bank President Christine Lagarde urged global leaders to discuss undervaluation of the Chinese currency as a facet of the imbalances endangering the global economy. The bloc is concerned about its trade imbalance with China, which reached €360.6 billion in 2025, according to EU data, up 15 per cent from the previous year.
China lets the market play a decisive role in exchange rate formation, the PBOC said in a statement, adding that it does not preset exchange rate target levels or intervene in long-term exchange rate trends.
“Attributing a decline in domestic industrial competitiveness, the weakening of fiscal and financial discipline and complex structural problems simply to the exchange rates of other nations amounts to evading and shirking one's own responsibility for making necessary adjustments,” the PBOC said.
China will report additional foreign exchange-related data to the International Monetary Fund starting from 2027, the central bank said.