China’s Yuan and Europe’s industry: a growing imbalance

In this episode of The Sound of Economics , host Yuyun Zhan is joined by Bruegel Senior Fellow Alicia García-Herrero and Jürgen Matthes of the German Economic Institute to discuss a growing concern for Europe’s economy: the undervaluation of Yuan, the Chinese currency and its impact on European competitiveness. Is China’s price advantage the result of productivity and innovation, or of deeper structural distortions such as subsidies, overcapacity, and currency management? And what policy options does Europe realistically have when existing trade defence instruments seem ill-suited to address economy-wide price and exchange-rate effects? Relevant research: Matthes, Jürgen, 2025, Yuan Undervaluation against the Euro: Unfair Cost Advantages for China?! , IW-Report, Nr. 36, Köln García-Herrero, A., T. Storella and J. Xu (2025) ‘ European companies operating in China: from digging in to rethinking their presence ’, Working Paper 14/2025, Bruegel This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox!

You can listen to China’s Yuan and Europe’s industry: a growing imbalance online on Radio and Podcast. Open the player on this page to stream the available audio.

China’s Yuan and Europe’s industry: a growing imbalance is an episode from The Sound of Economics by Bruegel.

This episode is 43:03 long.

This episode was published on Jan 21, 2026.

Yes. Use the heart button on the episode page to add it to your favorite episodes list.

Yes. This page shows related episodes from The Sound of Economics when more episodes are available from the podcast feed.