China has no need or intent to gain competitive advantages through currency devaluation: central bank governor

China has no need or intent to gain competitive advantages in trade through currency devaluation, Pan Gongsheng, governor of the People's Bank of China (PBC), the central bank, said at the opening ceremony of Annual Conference of Financial Street Forum 2026 in Beijing on Monday.

An important change in China's trade in recent years is that its sensitivity to exchange rate movements has dropped significantly, Pan said.

Pan's remarks came as some foreign media reports claimed that China was deliberately keeping the yuan weak to boost its export competitiveness.

During successive rounds of severe external shocks, including the Asian financial crisis, the global financial crisis and trade wars launched by certain countries, China has never engaged in competitive devaluation. Instead, it has taken effective measures to prevent the yuan exchange rate from overshooting in the direction of depreciation, the central bank governor said.

Addressing the yuan's exchange rate, Pan said that, as an important price in financial markets, it is currently attracting considerable attention. Recently, the PBC released an important document clarifying its policy stance on the yuan exchange rate and responding professionally and objectively to concerns at home and abroad.

China operates a managed floating exchange rate system based on market supply and demand, with adjustments made with reference to a basket of currencies, Pan said.

After 2017, the PBC withdrew from regular intervention in the foreign exchange market. In recent years, the yuan exchange rate has gone through multiple cycles of appreciation and depreciation, with greater flexibility moving in both directions.

Under specific circumstances, the PBC uses macro-prudential management tools and, in extreme circumstances, even intervenes directly in the foreign exchange market to correct the market herding effect and the self-reinforcement of irrational expectations. These measures are consistent with international rules and practices, Pan said.

Global foreign exchange market trading volumes are enormous, averaging nearly $10 trillion a day in 2025. Daily foreign exchange turnover involving the yuan exceeds $800 billion, with about 80 percent of transactions taking place offshore.

Pan said that it is difficult for a central bank to exert a sustained influence on exchange rate trends over the medium to long term, let alone continuously enhance trade competitiveness through such influence.

China's trade development is rooted in the growing international competitiveness of its industries, he said. It has benefited from more than 40 years of reform and opening up, an exceptionally large market, comprehensive industrial chains and infrastructure systems, an abundant supply of highly skilled workers, and sustained research, development and innovation.

As China's exports move toward the middle and higher ends of the value chain, foreign trade enterprises have significantly strengthened their bargaining power and are increasingly using exchange rate hedging tools and settling transactions in yuan, Pan said.

Meanwhile, as an important macroeconomic variable, the exchange rate is influenced by multiple factors, including economic growth, monetary policy, financial markets, geopolitics and unexpected risk events. There is no simple linear relationship between the exchange rate and the current account, said Pan.

Addressing global economic imbalances is the shared responsibility of those countries running deficits and those running surpluses, Pan said.

In an international monetary system dominated by a single major currency, the issuer of the principal reserve currency has long run huge fiscal and current account deficits. Simply attributing its persistently high fiscal deficits, declining industrial competitiveness and complex structural problems to other countries' exchange rates amounts to shifting and evading its own responsibility for adjustment, Pan said.

Yuan settlements accounted for 29.1 percent of China's cross border receipts and payments under goods trade in the first half of 2026, up 1 percentage point from a year earlier, according to the PBC's 2026 Yuan Internationalization Report.

China is firmly implementing the strategic directions and key measures set out in the 15th Five Year Plan (2026-30), continuing to transform  economic growth model, expand domestic demand and advance opening up at a high level, contributing to a new round of dynamic rebalancing in the global economy, he said.

Turning to yuan internationalization, the process was formally launched in 2009. Driven by market demand, alongside changes in the current international environment and geopolitical situation, international demand for using the yuan has strengthened significantly, and its internationalization has continued to advance.

The yuan has become the largest settlement currency for China's cross-border receipts and payments, the world's second largest trade financing currency and the third largest payment currency.