China's Market Meddling Makes Yuan Look Like a Poor Reserve Currency

China’s escalating intervention in its collapsing stock market -- after months of quiescence while equities surged -- is tarnishing policy makers’ efforts to establish the yuan as an official reserve currency.

An outflow of capital from China earlier this year already exposed the dangers to officials of a full dismantling of cross-border capital controls. The appetite to let domestic investors put more funds overseas won’t be helped by the 34 percent plunge in the Shanghai Composite Index since June 12.