The People's Bank of China issued a statement rejecting accusations that China deliberately weakens the yuan to gain a trade advantage, after the European Union called on Beijing to let the currency strengthen in order to reduce a record-high trade surplus. The statement said China has no need or desire to weaken its currency to gain a competitive trade edge, and has never pursued devaluation to compete with other countries. It added that blaming another country's currency for a loss of competitiveness, which leads to weaker fiscal and monetary discipline and complex structural problems, amounts to shirking responsibility for necessary adjustment. The episode comes as Maros Sefcovic, the EU's trade chief, visits Beijing to discuss ways to narrow the bloc's trade deficit with China. In 2025, China posted a record trade surplus of nearly 1.2 trillion dollars, equal to roughly 6% of gross domestic product. The European Union, meanwhile, is concerned about its trade imbalance with China, which stood at 360.6 billion euros, or 404 billion dollars, in 2025, up 15% from a year earlier. The worry is that this could lead to a new China Shock 2.0, after another wave of Chinese exports floods into markets and rattles the industries and economies of trading partners. Earlier, in June, European Central Bank President Christine Lagarde urged world leaders to discuss the yuan being undervalued, which she cited as one factor behind imbalances and a risk to the global economy.
China rejects EU/ECB pressure to let the yuan strengthen, signaling it will keep the currency weak/undervalued, which weakens CNY versus USD.
