China has pushed back against longstanding accusations that it manipulates its currency to boost exports, releasing a sharply worded policy paper ahead of EU trade talks. The offshore renminbi (CNH) has risen over 9% against the dollar since early 2025 and is flat versus the euro, though up 12% from a mid-2025 low. Despite the EU running a ~€1bn daily trade deficit with China, Beijing denies using currency devaluation for competitive advantage.
Chinese officials argue that attributing industrial decline to exchange rates shifts blame unfairly and ignores domestic structural issues. They assert that China’s trade growth stems from genuine industrial competitiveness, not currency manipulation, and note there is no internationally accepted method to determine equilibrium exchange rates. The paper highlights that the renminbi’s nominal effective exchange rate has appreciated over 50% since 2005 per BIS data, with the real effective rate up 35%.
China maintains it is a responsible global actor and urges other nations to address their own economic shortcomings through structural reforms rather than blaming the RMB.
Source: Financial Times Markets · Summarized by HeadlinesBriefing