What changed
The People’s Bank of China issued an official policy stance on the renminbi exchange rate on October 8, organizing its case around exchange-rate formation, external-balance assessments and current-account surpluses. It said China’s currency regime is market-based, referenced to a basket of currencies and managed as a float, while rejecting the IMF’s external-balance estimate as definitive proof that the renminbi is undervalued.
Why it matters
The statement turns a familiar accusation into a three-part argument: exchange rates reflect several forces, technical assessments should not be selectively used, and trade imbalances cannot be pinned on one country’s currency alone.
The numbers explain why Beijing is pushing back. The renminbi has appreciated 23% against the US dollar cumulatively since the 2008-era reforms, and it has moved through three appreciation cycles and three depreciation cycles since 2010. China’s current-account surplus as a share of GDP has also fallen from 9.9% in 2007.
The dispute now hinges partly on how the IMF’s figures are read. Its 2026 external-sector report gave a median estimate of a 21.3% gap in China’s real effective exchange rate, but another method cited in the discussion put the currency 0.5% above fair value at the end of 2025. Those are not small differences; they point to a fight over models as much as markets.
Beijing’s broader claim is that a stronger renminbi would not automatically erase China’s export edge. One study cited found that a 10% appreciation reduced renminbi-denominated export prices by less than 0.5%, while research and supply-chain improvements continued to support competitiveness.
Whether the statement changes exchange-rate operations or the policies of other governments remains unclear. For now, its main effect is political and diplomatic: China has put its preferred terms of debate on the record, insisting that global imbalances be addressed through broader changes in saving, consumption, investment and fiscal policy rather than by forcing a single currency higher.
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