By Bloomberg News | Updated on Oct 08, 2026 at 11:37 AM
China’s central bank rejected claims that the yuan is undervalued ahead of scheduled trade talks with the European Union, arguing that exchange-rate adjustments won’t resolve the structural problems behind global economic imbalances.
The People’s Bank of China issued a formal document on its policy position on Thursday along with an English translation. The paper defended its management of the yuan and argued that the export powerhouse’s growth is driven by its increasing industrial competitiveness.
“China has no need or intent to gain competitive advantages through currency devaluation,” it said.
The statement came ahead of planned discussions between the EU’s trade chief and Chinese Commerce Minister Wang Wentao. The documents do not mention the talks, which are set to take place in Beijing this week.
The currency has become a source of friction in relations with Europe, where policymakers and economists argue that its low value gives Chinese exporters an advantage. The EU’s trade deficit with China now exceeds €1 billion ($1.1 billion) a day, and the two sides have set an October deadline to make progress on their trade disagreements.
EU Trade Commissioner Maros Sefcovic said he will look to rebalance the trade relationship, beginning his China trip on Thursday with a meeting with EU businesses in the world’s second-largest economy.
“The message around the table was clear: the need to improve access to the Chinese market, while boosting our economic security,” he said in a post on X.
Read More: EU Takes Harder Line on China’s Trade Gap as Talks Kick Off
The PBOC challenged the use of International Monetary Fund assessments as definitive evidence that the yuan is too weak. Citing those findings as “official evidence” of undervaluation amounts to “a misinterpretation and misuse,” the PBOC said.
The IMF estimated China’s real effective exchange rate — which is measured against a basket of partners’ currencies and adjusted for inflation — was 12% to 20% undervalued in 2025.
Read More: Why China’s Yuan Is Drawing Scrutiny in Europe: Explainer
The central bank also said China will begin reporting foreign-exchange operation data to the IMF in 2027 as part of efforts to improve transparency. It didn’t specify whether the information would be made public or detail the scope of the reporting.
The PBOC reiterated that it neither targets a specific yuan level nor seeks to determine its longer-term trajectory.
The yuan has strengthened about 9% against the dollar since 2025, according to the statement. The PBOC attributed China’s export growth to its competitiveness and said trade had become less sensitive to currency movements as companies upgraded their products and increased hedging.
Reducing global imbalances requires action by both surplus and deficit countries, the bank said. It blamed declining competitiveness in some economies on high costs, inadequate infrastructure and underinvestment, while reiterating China’s commitment to expand domestic demand and boost consumption.