The People’s Bank of China (PBOC) issued a policy paper on Thursday explicitly denying allegations that the nation is manipulating its currency to secure a competitive edge in global trade. The central bank stated that it has no intent to pursue competitive devaluation, attributing China’s recent trade growth instead to the expansion of its industrial sector rather than currency-based advantages.

This rebuttal arrives at a sensitive time, as China enters a period of intense trade negotiations with European officials. The accusation that the yuan is undervalued has been a central point of contention for European trade representatives, who argue that a weaker yuan makes Chinese exports artificially cheaper. By publishing the policy paper in both Chinese and English, the PBOC appears to be making a direct effort to address international concerns and preemptively shape the narrative ahead of potential trade war discussions. While the PBOC maintains that its currency policy is stable and market-driven, the move highlights the growing friction between Beijing and its trading partners over economic policy and industrial competition.