By The Epoch Times | Created at 2026-09-21 23:07:10 | Updated at 2026-09-21 23:42:48
53 minutes ago
Chinese 100 yuan notes and U.S. $100 notes, in Beijing on April 8, 2025. Jade Gao/AFP via Getty Images
China’s yuan has risen to its strongest level against the U.S. dollar in more than four years, days before Chinese Communist Party leader Xi Jinping meets President Donald Trump in Washington on Sept. 24.
The People’s Bank of China on Sept. 21 set its daily midpoint at 6.7487 yuan per dollar, strengthening the reference rate for a ninth consecutive trading day. The onshore yuan later closed at 6.6955 per dollar, its strongest daily close since July 2022.
A weaker yuan lowers the dollar price of Chinese exports, giving Chinese producers a price advantage in the U.S. market. A stronger yuan does the reverse and makes foreign goods cheaper for Chinese buyers.
China does not allow its currency to float freely. The central bank sets a daily reference rate and limits how far the yuan can move from it.
IMF Says Yuan Still Undervalued
Despite the recent rise against the dollar, the International Monetary Fund (IMF) says the yuan remains undervalued on a trade-weighted, inflation-adjusted basis.
IMF staff estimated in February that the yuan was undervalued by between 12.1 percent and 20.7 percent in 2025, with a midpoint estimate of 16.4 percent.
The IMF also said in July that China was a major contributor to widening global imbalances, with its surplus from trade and other overseas transactions increasing by roughly $300 billion in 2025—the largest such widening in absolute terms in more than two decades.
US, Europe Push China to Rely Less on Exports
At the Sept. 1 G20 finance meeting in Asheville, North Carolina, members backed language calling on countries with large and persistent surpluses to remove distortions that hold back domestic consumption and leave them too dependent on exports.
China was the only G20 member present to object to that paragraph, according to a footnote in the chair’s statement.
Treasury Secretary Scott Bessent told Congress on Sept. 15 that economies representing more than two-thirds of global GDP had agreed on the need to address “excessive and persistent imbalances.”
European Commission President Ursula von der Leyen said Sept. 16 that the European Union’s trade deficit with China had reached about $1.15 billion a day. She said China’s weak domestic demand had increased its need for the European market and called for the trade relationship to be rebalanced.
China Sells Abroad as Spending Lags at Home
In August, the total retail sales of consumer goods in China were up by 0.4 percent year on year. During the first eight months of 2026, fixed-asset investment fell 7.2 percent, and private investment fell 10.1 percent, according to China’s National Bureau of Statistics.
During the same eight months, China exported about $3.01 trillion in goods and imported about $2.18 trillion, leaving a goods surplus of roughly $830 billion.
The IMF has urged China to shift growth toward household consumption. Its latest China review said private domestic demand remained weak and linked China’s strong exports partly to weak domestic demand and a depreciating inflation-adjusted exchange rate.
Neither the White House nor Beijing has publicly identified exchange-rate policy as an agenda item for the Sept. 24 Trump–Xi meeting.
