Germany hews EU’s tough China line with call for ‘Plaza Accord’ talks on yuan

German Chancellor Friedrich Merz signalled a major shift in Berlin’s economic relations with Beijing on Friday, saying the Chinese currency was undervalued by 30 per cent, well above the International Monetary Fund’s estimate of “about 16 per cent”.Speaking in Brussels after a European Council summit, Merz said China was “flooding markets” through the use of “high subsidies”, adding that “subsidising overcapacities” along with a “currency that isn’t convertible freely … is not acceptable”.Merz’s comments are some of his most forceful remarks on Beijing since becoming chancellor last year and address one of the major factors in the debate over industrial overcapacity.