China's RMB valuation and trade data spark debate in Europe and IMF

On June 22, European Central Bank president Christine Lagarde cited International Monetary Fund research indicating that the Chinese yuan is undervalued by roughly 15‑16 percent. She urged the G7 to include the yuan in future valuation discussions but warned that a repeat of the 1985 Plaza Accord approach would be unsuitable in today’s global context. Lagarde also referenced German chancellor claims that the yuan may be undervalued by as much as 30 percent, echoing broader European calls for a euro‑yuan rebalancing.

A separate analysis released in late June argues that Chinese authorities have altered official balance‑of‑payments statistics, leading the OECD and IMF to overstate Eurozone current‑account surpluses. The report says China’s reported investment‑income deficit is fictitious and that customs‑based trade data would show China’s goods‑and‑services surplus roughly twice that of the Eurozone. It recommends alternative metrics to improve the accuracy of global economic assessments.