China's Central Bank Rejects Yuan Devaluation Accusations From Western Partners

The People's Bank of China's public denial arrives amid active trade disputes with the EU and the United States, making the statement's timing as significant as its content.

China's central bank stated on October 8, 2026, that it has no need or intention to use yuan depreciation as a tool for trade competitive advantage and has never engaged in competitive currency devaluation, according to a report by the Korea Times.

The People's Bank of China issued the statement in direct response to criticism from Western trading partners, including the European Union, which have argued that China keeps the yuan undervalued to make its exports cheaper and imports more expensive for Chinese consumers, according to the Korea Times report.

Currency valuation disputes between China and Western governments are not new. The United States Treasury Department formally labeled China a currency manipulator in August 2019, a designation it reversed in January 2020 as part of the Phase One trade agreement, according to U.S. Treasury public records. The EU has more recently raised similar concerns as its trade deficit with China has grown.

The mechanism at issue centers on how central banks manage their currencies. A government or central bank can influence exchange rates by buying or selling its own currency in foreign exchange markets, setting interest rates, or imposing capital controls. Critics of China's currency policy argue the People's Bank of China has historically intervened to keep the yuan from appreciating to levels that market forces alone would produce.

The People's Bank of China sets a daily midpoint rate for the yuan against the U.S. Dollar and allows the currency to trade within a defined band around that midpoint. This managed float system gives Chinese authorities more direct influence over the exchange rate than fully free-floating systems used in the United States or the European Union.

The timing of the October 8 statement follows a period of sustained trade friction. The European Commission imposed additional tariffs on Chinese-made electric vehicles in 2024, citing what it described as unfair state subsidies, according to European Commission public records. China disputed those findings and filed a challenge at the World Trade Organization.

Exchange rate levels have direct implications for trade balances. If the yuan trades at a lower value relative to the dollar or euro than economic fundamentals would suggest, Chinese-made goods become relatively less expensive for foreign buyers, which can increase Chinese export volumes at the expense of domestic producers in importing countries.

The People's Bank of China did not release detailed economic data alongside the October 8 statement to support its position, according to the Korea Times report. What specific data or methodology would substantiate or refute the claim that the yuan reflects fair market value remains a matter of ongoing dispute among economists and government analysts in multiple countries.

Western criticism of Chinese currency practices has intensified alongside broader concerns about trade imbalances. China recorded a goods trade surplus with the European Union of approximately 291 billion euros in 2023, according to Eurostat data published by the European Commission.

The statement's release without an accompanying press conference or detailed technical briefing means independent verification of China's specific claims about intervention activity is not possible from the public record. Full transparency on the People's Bank of China's foreign exchange operations would require disclosure of its intervention records, which are not routinely published in real time.