Next China: Fighting the Currency Market

The power Xi Jinping’s government wields over China’s economy and markets is immense, especially when compared with how much influence authorities in the West have at their disposal. But as a recent plunge in the Chinese currency has shown, nothing is absolute.

With the yuan’s exchange rate to the US dollar falling this week to the lowest level since 2008, the Chinese central bank stepped forward late Wednesday to tell people to stop betting on further depreciation. The People’s Bank of China has “plenty of experience” fending off external shocks and effectively guiding market expectations, it warned, adding that speculators will “definitely” lose money.