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William Pesek

Give China's Devaluation a Chance

A weak yuan sets Beijing up for big reforms.
Don't count out reforms.

Don't count out reforms.

Photographer: FREDERIC J. BROWN/AFP/Getty Images

China's surprise devaluation is sure to stir up fear and loathing among the world's economic populists. (Keep your eyes on Donald Trump's Twitter account.) But the move deserves praise, not condemnation.  It might even prove a boon for world growth.

Beijing spent much of the last year propping up the yuan to combat capital outflows, avoid debt defaults and win a place among the International Monetary Fund's five reserve currencies. But with growth sputtering and deflation looming, China has now reversed course, cutting its daily reference rate yesterday by 1.9 percent, the most in two decades. The Chinese government has effectively admitted that risks are accelerating in the world's second-biggest economy.