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Pietro Ventani's avatar

Much simpler reason, in my view, why China hasn’t devalued—and why the Yuan has actually strengthened since April 2nd:

Beijing needs a strong CNY to advance its core strategic goal: de-dollarization and encouraging trade partners to transact in yuan.

A devaluation would be self-defeating—inviting fresh retaliation from the U.S./EU that could erase any competitive gains. Revaluation, on the other hand, reduces tensions.

There’s no urgency—data shows China’s high value-added exports remain highly competitive even without FX help.

Thanks to Ukraine-related sanctions, China enjoys some of the world’s lowest energy import costs—a structural edge.

A strong yuan is also critical to curb capital outflows and maintain domestic financial stability.

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G Wilbur's avatar

The USA only accounts for 15% of China exports. Devaluation would also affect its other 85%. Perhaps they hope to avoid such a broad impact.

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