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Commerzbank questions yuan undervaluation thesis amid trade gains

Commerzbank’s Volkmar Baur cites China’s trade surplus rise from about $400 billion to $1,180 billion between 2019 and the end of 2025 as evidence of intentional exchange-rate weakness.

Reported · Written up by our desk · Central Banks

Commerzbank’s Volkmar Baur has pushed back on a recent internal view that China’s yuan is meaningfully undervalued, arguing instead that China’s currency management and gold purchases point to deliberate weakening.

He said China’s export and trade performance since 2019 suggests more than a neutral exchange-rate effect for global trade flows, noting that China’s real exports rose 47% between 2019 and the end of 2025, while global trade increased 15%.

Baur also highlighted that China’s trade surplus climbed from roughly $400 billion to $1,180 billion over the same period, and he argued the scale of the surplus is hard to reconcile with the idea that about a 20% real exchange-rate advantage would not drive outcomes.

In addition, he said China’s manufactured-goods trade surplus in 2025 amounted to 1.75% of global gross domestic product, adding that Germany and Japan, combined, did not reach that level in their best years, while acknowledging that not all of the result can be attributed to the yuan alone, according to FXStreet.

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