French Media: France and Germany Unite Rarely to Criticize Undervaluation of Renminbi; PBOC: RMB Exchange Rate Determined by Market
Le Monde Économie reports that, amid growing Chinese trade surplus with Europe and mounting pressure on European business competitiveness, France and Germany have unusually joined forces on the issue of currency valuation, criticizing the undervaluation of the renminbi. The report notes that in a joint statement released on October 5, the two countries addressed this diplomatically and commercially sensitive topic without explicitly naming any party.
In the first nine months of this year, the trade surplus between China and the EU increased by 26%, reaching €247 billion—its highest level on record. German Chancellor Merz had previously accused the renminbi of being undervalued by 25% to 30%, a claim driven by Germany’s record trade deficit with China, which has eroded its industrial reserves.
The People’s Bank of China responded by stating that the RMB exchange rate is determined by market forces, not subject to manipulation by an “invisible hand.”
However, the report also observes that Chinese firms hold significant cost advantages across ten key emerging industries, including batteries and solar energy, with average production costs approximately 58% lower than those of their international competitors. According to a McKinsey assessment cited in the report, even a 25% appreciation of the currency would only offset about one-quarter of this cost advantage.
Source: rfi
Original: toutiao.com/article/1879659631873031/
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