BCA Research analysts assert China's currency remains undervalued and highly competitive, enabling Beijing to allow yuan appreciation while maintaining export dominance. This assessment follows the offshore yuan's surge to its strongest level against the dollar in nearly three years, reflecting a weaker greenback and renewed questions about the dollar's reserve status. Chinese President Xi Jinping's call for the yuan to become a 'powerful currency' for global transactions aligns with BCA's view that the currency's strength can facilitate China's economic shift from exports toward domestic consumption, though this transition faces challenges from a protracted real estate crisis. The analysts argue a stronger yuan could narrow China's capital account deficit and support Beijing's strategy to reduce U.S. dollar dependency for greater sovereignty.