Indeed, the widening of the euro area’s trade deficit with China, which gained particular momentum after 2003, has paralleled a steady depreciation of the renminbi against the euro. Even after China reformed its exchange rate regime in July 2005, the euro has continued to appreciate against the renminbi.
Although the renminbi has since 2005 appreciated by around 10-11% against the US dollar and the Japanese yen, it has depreciated continuously against the euro, loosing about 8% of its value against the single currency. Over the same period, China’s trade surplus vis-à-vis the euro area has grown by more than 20%. 3.