China's central bank says it does not seek trade advantage through yuan devaluation

The People's Bank of China on October 8 published a statement setting out its policy position on the yuan exchange rate, saying China has no need and no intention to gain a trade advantage through depreciation and has never engaged in competitive devaluation. The bank said the exchange rate, as an important price in financial markets, has long attracted attention and that discussion of it has increased recently. It said China's trade development is rooted in the rising international competitiveness of its industries. [ 1 , 2 , 3 , 4 , 8 , 11 ]

The bank said China runs a managed floating regime based on market supply and demand with reference to a basket of currencies, with the market playing the decisive role. According to CLS and Yicai, it said it does not preset a target level for the exchange rate or intervene in its long-term trend, and that it exited regular foreign-exchange intervention after 2017. 36Kr reported that the bank said it focuses on preventing large short-term swings, especially sharp short-term depreciation, and that during major external shocks such as the pandemic outbreak and the April 2025 tariff war it used macroprudential tools and expectation guidance, and in extreme cases intervened directly, to correct herd behaviour and irrational depreciation expectations. [ 1 , 3 , 6 , 9 , 10 ]

The statement said Chinese trade has become markedly less sensitive to exchange-rate changes, 36Kr reported. It said imports and exports of high-tech products grew 7.9% a year on average over the past five years and 11.4% in 2025, contributing nearly 60% of overall foreign-trade growth, and that about 30% of trade is settled in yuan while companies' hedging ratio is around 30%. The statement said that during the Asian financial crisis of the 1990s the Chinese government pledged not to devalue the yuan, that the yuan stayed basically stable in 2008, and that in recent years, amid a trade war and steep Federal Reserve rate rises, the central bank took macroprudential measures to prevent the yuan overshooting toward depreciation. [ 8 , 13 ]

The bank said the exchange rate has no simple linear relationship with the current account and is shaped by economic growth, monetary policy, financial markets, geopolitics and sudden risk events. It said international methods for assessing equilibrium exchange rates are immature, and that treating individual assessment results as an "official basis" for yuan undervaluation is a misinterpretation and misuse; CLS reported that the statement named the IMF's External Balance Assessment in this context. [ 1 , 3 , 5 , 7 , 12 ]

The bank said global imbalances are closely linked to the evolving global division of labour, contradictions in the international monetary system and long-term high fiscal deficits and consumption in some countries, and that attributing domestic problems to other countries' exchange rates is shirking responsibility. It said that during the 15th Five-Year Plan period China will expand domestic demand, improve the business environment and deepen opening up. [ 1 , 3 , 4 , 11 ]