European Concerns Over RMB Valuation and Trade Relations with China
German Chancellor Friedrich Merz has claimed the renminbi is undervalued by 30%, suggesting a new Plaza Accord. European trade discussions focus on addressing trade deficits and competition with China, reflecting broader manufacturing sector anxieties.
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German Chancellor Friedrich Merz's remarks at a recent EU summit highlighted a perceived undervaluation of the renminbi, suggesting it is 30% below fair value. Discussions among EU leaders are centered on trade defense measures in response to trade deficits with China, as European politicians increasingly frame economic relations as a systemic challenge.
In 2025, bilateral trade between China and Germany reached over 250 billion euros ($287 billion), with 5,200 German firms operating in China. A German Chamber of Commerce survey indicates that 61% of companies plan to boost investments in China within two years.
Addressing imbalances through protective measures could undermine European competitiveness and consumer welfare. European countries must reassess their economic strategies rather than attributing challenges to external factors.
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