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Germany's Merz pushes China currency talks, urges freer yuan - Finance news and analysis from Global Banking & Finance Review
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Germany's Merz pushes China currency talks, urges freer yuan

Published by Global Banking & Finance Review

Posted on July 13, 2026

1 min read

· Last updated: July 13, 2026

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Germany's Merz Pushes for Currency Talks with China, Urges Freer Yuan

Merz Advocates for Dialogue on China's Monetary Policy

BERLIN, July 13 (Reuters) - German Chancellor Friedrich Merz on Monday called for a dialogue with China on Beijing's monetary policy, saying that the EU could not win, no matter how innovative or good the bloc may be, against a competitor that artificially manipulates its currency.

Calls for Currency Reform

Dialogue with China

"We are now trying to steer the dialogue with China toward a solution ... an attempt to persuade China to allow its own currency to float freely, including in the context of competition in the capital markets," Merz said in a speech at a German university.

Implications for EU-China Competition

(Reporting by Miranda MurrayEditing by Linda Pasquini)

Key Takeaways

  • Merz calls for an EU–China dialogue on monetary policy, pushing for a freely floating yuan to curb currency-based trade distortions
  • He cited historical precedents like the Plaza Accord and Europe’s pre‑euro exchange‑rate systems as models for cooperative currency adjustment discussions (euronews.com)
  • China’s yuan may be undervalued by up to 30% against the euro—a factor in the EU’s swelling trade deficit—while EU leaders frame this issue as a core fairness and competitiveness concern (scmp.com)

References

Frequently Asked Questions

What did German Chancellor Friedrich Merz call for regarding China?
Chancellor Merz called for the EU to engage China in dialogue about allowing the yuan to float freely.
Why does Merz want a freer Chinese yuan?
Merz believes that artificial currency manipulation by China creates unfair competition in capital markets.
How does Merz propose to address currency issues with China?
Merz advocates steering dialogue with China to find a solution and persuade Beijing towards a free-floating yuan.
When and where did Merz make his comments about China's monetary policy?
Merz made these comments on Monday during a speech at a German university in Berlin.

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