The International Monetary Fund (IMF) is set to review China's currency in light of recent claims that the yuan is 'substantially undervalued', according to the Wall Street Journal.The value of the yuan was found to have grown far faster than previous years by the IMF, with the effective exchange rate, adjusted for inflation, based against a basket of currencies and accounting for inflation, rose more than eight per cent in 2011. There has been doubt cast over whether the Chinese economy can continue at such growth, considering the recent recessions in the US and Europe.The announcement from the IMF comes as China announces its plans to make Shanghai the global centre of yuan trading, in an attempt to create a domestic version of markets in London, New York or Hong Kong. This move would place currency movements in the yuan in the hands of the government, rather than the offshore market.According to Reuters, the daily-point price published by the central bank in the onshore yuan market would also set the level for foreign yuan trading markets. The Shanghai Interbank Offered Rate, which is backed by the government, would be the benchmark for yuan credit everywhere.Trade leaders across the world, particularly from the US, have argued for some time that the undervaluation of the Chinese yuan gives it an unfair advantage making its exports cheaper on the global market. US treasury secretary Timothy Geithner  has recently argued that though the yuan has appreciated, it remains undervalued and is "still below almost all measures of fundamentals."In his speech, delivered during the Davos World Economic Forum, he highlighted the intention of Obama to get tougher over a variety of trade issues concerning the far eastern country.Eswar Prasad, a Cornell University economist and a former senior IMF China expert, said: "All of the relevant indicators, the current account and trade surpluses, the pace of reserve accumulation and the exchange rate itself, have moved in the direction of suggesting the yuan is no longer much undervalued."For more information on foreign exchange treasury services and risk management, visit our Corporate FX site