Chinese Yuan: Structural export drivers outweigh CNY – Commerzbank
Commerzbank’s Michael Pfister examines whether the weaker CNY explains China’s rising export market share. Using bilateral real exchange rates across major partners, he finds no systematic link between CNY moves and market share gains, including in advanced sectors like electric cars.
A new study from Commerzbank, led by Michael Pfister, suggests that structural factors play a larger role in China's export market share gains than the Chinese yuan's (CNY) exchange rate movements. Despite the CNY depreciating against many currencies between 2019 and 2025, there is no clear correlation between CNY changes and increased export market share, even in advanced sectors like electric cars.
In fact, a stronger CNY is only marginally associated with higher market share in certain categories. While the yuan may still be considered undervalued, the analysis indicates that changes in the real exchange rate do not account for recent shifts in market share. European policymakers should be cautious in expecting CNY appreciation to reverse their losses in the Euro-area.
This conclusion is based on a comprehensive examination of bilateral real exchange rates across major trading partners and highlights the importance of considering other structural factors when analyzing the strength of Chinese exports.
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