EU urged to counter China’s allegedly undervalued yuan to protect European industry
Executive summary: Economists claim the Chinese yuan is undervalued by up to 30%, arguing this harms European industry; a Handelsblatt op-ed calls on the EU to counter China’s unfair currency policy. An undervalued yuan gives Chinese exporters a price edge, pressuring EU manufacturers, affecting trade balances and potentially triggering protectionist responses.
Who is involved: Brad Setser (US economist), Jürgen Matthes (German economist), EU policymakers, Chinese authorities, European industry representatives.
Likely next: The EU may launch investigations, consider trade remedies or WTO complaints; China is likely to defend its policy, keeping the issue on the EU’s trade agenda.
The Handelsblatt opinion piece cites US economist Brad Setser and German economist Jürgen Matthes, who argue the Chinese yuan is undervalued by as much as 30%, giving Chinese exporters an unfair price advantage in Europe. They contend this distorts competition and harms EU manufacturers, urging the EU to take action against China’s currency policy. The analysis remains focused on the claimed imbalance and its potential trade-policy repercussions, without speculating on specific EU measures.
Timeline
- — Gastkommentar – Global Challenges: Die EU sollte Chinas unfaire Währungspolitik kontern (Handelsblatt)
Analysis — what this means
Likely next events
- EU may launch an investigation into CNY undervaluation
- Possible WTO dispute over currency practices
Sectors affected
- Manufacturing
- Automotive
- Machinery
Regulatory implications
- Trade remedy actions
- Enhanced currency monitoring
Historical parallels
- US-China trade war 2018‑2020
- EU anti‑dumping duties on Chinese steel
- 1985 Plaza Accord addressing currency misalignments