The European Union Chamber of Commerce in China today accused Beijing of keeping the yuan artificially devalued against the euro, favoring Chinese exports and increasing the risk of trade retaliation by partners.
In a report released this Wednesday, the 10th, the organization states that the Chinese currency has depreciated 7.5% against the euro since the beginning of the year, reaching its lowest level in a decade, despite China’s successive trade surpluses, which are expected to exceed one billion dollars (860 billion euros) in 2025.
“The undervaluation of the renminbi acts as a subsidy for exports,” said Jens Eskelund, president of the European chamber, warning that this perception could facilitate the imposition of tariffs or ‘anti-dumping’ investigations by other countries.
According to economists cited in the report, the real effective exchange rate of the Chinese currency – weighted by a basket of currencies – has fallen 18% since March 2022. This trend reflects weak domestic demand and excess industrial capacity, which have kept prices under pressure.
Official data released today confirm this dynamic, with production prices falling 2.2% in November, the 38th consecutive month of contraction. The consumer price index rose 0.7% – the highest value since February 2024 – but remains moderate.
Beijing denies any exchange rate manipulation, stressing that it follows market principles. However, the People’s Bank of China continues to exercise tight control over the exchange rate.
Despite strong external performance, China has focused on strengthening its high-technology industry instead of stimulating domestic consumption, deepening deflationary pressures.
The European chamber’s report comes at a time when other foreign business associations are warning of operational difficulties in the Chinese market, although some companies are finding opportunities in partnerships with Chinese groups in the process of internationalization.