Commerzbank’s Volkmar Baur challenges recent internal analysis on CNY undervaluation and exports, arguing that China’s exchange-rate management and gold purchases point to deliberate weakening. He highlights China’s outsized export and trade-surplus gains since 2019 and notes that a roughly 20% real exchange-rate advantage is unlikely to be neutral for global trade flows.

Exchange-rate policy and export dominance

“Between 2019 and the end of 2025, China increased its real exports by 47%, while global trade grew by only 15% over the same period. China has therefore gained market share somewhere in the world. During the same period, China’s trade surplus rose from about USD 400 billion to USD 1,180 billion.”

“Looking exclusively at manufactured goods, China’s trade surplus in 2025 amounted to 1.75% of global gross domestic product. Even in their best years, the world’s top exporters – Germany and Japan – did not even reach this figure combined.”

“Unlike the D-Mark or the JPY – which, however, appreciated sharply against the US dollar in the late 1980s – the real exchange rate of the CNY depreciated by about 10% on a trade-weighted basis between 2019 and 2025, and by as much as 22% against the euro.”

“Now, certainly not all of this can be attributed to the undervalued CNY. In economics, there is rarely (if ever) just one reason for a particular outcome. And in some product groups, China has actually created a global export market where none existed before.”

“But as an economist, I find it nevertheless difficult to argue that a 20% price difference has no effect on supply and demand.”