With a constant grudge, German Chancellor Merz once again raised the issue of the RMB exchange rate, attempting to "revive" the "Plaza Agreement." According to reports from the Berlin Morning Post and Bloomberg, Merz claimed in a speech at the University of Cologne on Monday (the 13th) that the RMB had been "undervalued by 25%" compared to the euro over the years. This, he said, gave Chinese exporters a so-called "unfair price advantage," leading to a large number of low-cost goods flooding into the European market and further widening the EU's trade deficit with China.
He said seriously that, no matter how outstanding the EU's own innovation capabilities or how high its development level is, if competitors 'deliberately manipulate their currencies', the EU will not be able to gain an advantage.
Mertz also claimed that Europe has long underrated China's influence in the global political and economic fields, and needs to engage in what he called "political dialogue on monetary issues" with China. He said, "We are promoting dialogue with China to find solutions... trying to persuade China to allow its currency to float freely, especially in the context of capital market competition."
Mertz said that Europe faces a "very significant" issue when determining its approach to relations with China, and "we need to reduce our dependence on China."
Just last month, after the EU summit in Brussels, Mertz hyped up the claim that the RMB was “undervalued by 30%,” and called for the EU to take a tough stance towards China. He even advocated following the example of the Plaza Agreement signed by the United States with Japan 41 years ago to address trade deficits. Most scholars believe that the Plaza Agreement was the main reason for Japan’s prolonged economic decline.
In September 1985, finance ministers and central bank governors from the United States, Japan, Germany, France, and the United Kingdom gathered at the New York Plaza Hotel to coordinate policies aimed at weakening the US dollar. Mertz said, “That is also my current idea.”
However, ECB President Christine Lagarde recently stated that it may not be appropriate to take actions against China by emulating the Plaza Accord. She said, “The times since the Plaza Accord are different. We now find ourselves in a completely different situation.”
Regarding the relevant opinions, the People's Bank of China has issued a report stating that the RMB exchange rate is in line with China's economic fundamentals. Short-term fluctuations in the RMB exchange rate are driven by the market, while its long-term trend is determined by economic fundamentals.
Foreign Ministry spokesman Guo Jiaqun previously emphasized that the essence of Sino-European economic and trade relations is mutual complementarity and win-win cooperation. The competitive advantages of Chinese products do not come from subsidies, but rather from the combined effects of substantial scientific research investments, full market competition, and a complete industrial chain. China never deliberately pursues a trade surplus. It is not only willing to be the "world's factory," but also the "world's market."
