# China Rejects Trade Criticism as Germany Pushes for Global Talks on the Yuan

Beijing denied seeking a surplus after Chancellor Friedrich Merz called the Chinese currency sharply undervalued and urged coordinated international action.

- Published: 2026-06-22T10:14:06.946Z
- Canonical: https://polylog.news/2026-06-22/china-rejects-trade-criticism-as-germany-pushes-for-global-t
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [South China Morning Post](https://www.scmp.com/plus/news/china/diplomacy/article/3357925/china-rejects-trade-criticism-after-merz-backs-global-yuan-action?utm_source=rss_feed), [Euronews](http://www.euronews.com/my-europe/2026/06/22/a-decade-later-europeans-more-positive-about-the-eu-than-during-brexit)

China pushed back on Monday against mounting Western criticism of its trade practices, with Vice-Premier Ding Xuexiang declaring that "China never actively pursues a trade surplus," [the South China Morning Post reported](https://www.scmp.com/plus/news/china/diplomacy/article/3357925/china-rejects-trade-criticism-after-merz-backs-global-yuan-action?utm_source=rss_feed). The response followed German Chancellor Friedrich Merz becoming the latest leader to complain about surging trade imbalances.

Merz went further than most, calling for international talks on exchange rates and describing the yuan as undervalued by about [30 percent](https://www.scmp.com/news/china/diplomacy/article/3357742/germany-hews-eus-tough-china-line-call-plaza-accord-talks-yuan), well above the International Monetary Fund's estimate of roughly 16 percent and Goldman Sachs's figure of about 25 percent. He accused Beijing of oversupplying markets through subsidies and an unconvertible currency, and he referred to past coordinated currency agreements.

The dispute lands as Europe's internal politics shift. Pew polling shows Europeans hold [more favorable views of the European Union than during the Brexit period](http://www.euronews.com/my-europe/2026/06/22/a-decade-later-europeans-more-positive-about-the-eu-than-during-brexit), even as some eurosceptic parties poll strongly, giving Brussels political room to harden its line on China.

## What this means

A Western push to revalue the yuan through coordinated talks would mark a move away from purely market-set exchange rates toward managed realignment, a politicized approach to currencies. From a sound-money view, both China's managed, unconvertible yuan and the Western response illustrate how far the global monetary system has drifted from neutral money, with trade frictions now spilling directly into currency policy.

## What to watch

- Whether any country joins Germany's call for formal exchange-rate talks, because a coalition would turn rhetoric into a genuine push for managed currency realignment.
- China's daily yuan fixing and trade data, since a faster pace of appreciation or a widening surplus would show which direction the pressure is moving.