The Chinese yuan remains "undervalued and highly competitive," positioning Beijing to strengthen its national currency without losing its status as an export powerhouse. According to analysts at BCA Research, the yuan’s current undervaluation allows China to maintain its dominance in global markets, even as the currency starts to appreciate.

Ahead of the Lunar New Year, the offshore yuan hit a three-year high against the US dollar. This movement coincided with statements from the leaders of the two largest economies. Xi Jinping called for the yuan to become a "strong currency" for global reserves, while Donald Trump supported a weaker dollar as a way to reduce the US trade deficit.

BCA strategists, including Chester Ntonifor and Marko Papic, argue that a stronger yuan would benefit China. A rising currency would help shift the country’s focus from export-driven growth to boosting domestic consumption, which remains weak due to the ongoing real estate crisis. Additionally, a stronger yuan could reduce the capital account deficit and enhance China’s financial independence from Washington.

BCA estimates that the global market is expanding and that a competitive yuan will allow China to maintain its position in the global economy. Analysts recommend investors increase their exposure to Chinese assets, stating that the yuan has the potential to become Asia's new "currency anchor." Among the most promising strategies for the coming years, experts highlight a long position on the yuan against the Hong Kong dollar, expecting markets to increasingly recognize the growing power of China.