Full Breakdown
Goldman Sachs Says Chinese Yuan Undervalued by 20% Ahead of Trump-Xi Summit
5/11/2026, 11:07:31 PM
Core Valuation Assessment
Goldman Sachs Group Inc. estimates the Chinese renminbi (CNY) is more than 20 % undervalued versus the U.S. dollar. Using proprietary valuation models, the bank’s strategists project the on-shore USD/CNY rate to move from roughly 6.80 today to 6.70 within six months and to 6.50 in twelve months. The forecast implies an appreciation of about 4.5 % of the total undervaluation gap.
Background & Context
Goldman’s note links the valuation gap to China’s “external surplus…approaching unprecedented levels as a percentage of global GDP,” which the firm says reflects deep export competitiveness. The assessment arrives as President Donald Trump and President Xi Jinping are slated to meet in Beijing, a summit analysts expect to influence currency sentiment. The People’s Bank of China (PBOC) has kept the on-shore yuan within a ±2 % daily band around its fixing, a policy that can temper rapid overshoots but still allows gradual moves.
Key figures include Goldman strategist Kamakshya Trivedi, who leads the valuation team, and market participants such as JPMorgan Asset Management and Huatai Securities, which have issued their own outlooks for the yuan.
Data & Statistics
- Current on-shore USD/CNY rate: ~6.80 (Bloomberg) / 6.79 (Cryptobriefing).
- Goldman’s undervaluation estimate: >20 %.
- Goldman forecast: 6.70 in six months; 6.50 in twelve months.
- JPMorgan view: a “productive” summit could push the rate to 6.50.
- Huatai Securities projection: 6.40 – 6.50 within a year.
Official Statements & Responses
Goldman emphasized that while the Trump-Xi talks could help stabilize trade relations, the case for a stronger renminbi is “more fundamental and longer-lasting.” The bank also cited recent strength in PBOC fixings and higher exporter conversion ratios as evidence that a “gradual but sustained move” is the appropriate baseline. JPMorgan Asset Management similarly suggested the summit could act as a catalyst for further yuan gains. No official comment from Chinese authorities was included in the source material.
Conflicting Forecasts & Gaps
The outlooks differ on the magnitude and timing of appreciation: Goldman projects a 6.50 level in twelve months, Huatai forecasts a range of 6.40-6.50, and JPMorgan points to a potential 6.50 move tied specifically to the summit. Additionally, the current rate is reported as 6.80 in one source and 6.79 in another, reflecting minor reporting variance. No public statements from the PBOC or Chinese government were provided, leaving the policy response to the valuation gap unclear.
Verbatim Quotes
- “China’s external surplus is approaching unprecedented levels as a percentage of global GDP, reflecting deep levels of export competitiveness, and also a highly undervalued currency, with currency appreciation an equilibrium outcome of those forces,” — Goldman Sachs strategists, internal note (May 8)
- “productive” summit between President Donald Trump and Chinese leader Xi Jinping may be a catalyst that pushes the yuan to 6.50. — JPMorgan Asset Management
- “more fundamental and longer-lasting.” — Goldman Sachs (statement on the case for a stronger renminbi)
- “In English: if the RMB were trading where economic fundamentals suggest it should, it would be dramatically stronger against the dollar than it is right now.” — Goldman Sachs strategists
What’s Next
Analysts will watch the Thursday-Friday Trump-Xi summit for any signals that could accelerate yuan appreciation. Market participants expect continued monitoring of PBOC fixings, exporter conversion ratios, and the broader U.S.–China trade dialogue, all of which could shape the yuan’s trajectory toward the projected 6.50 level.
