In allowing yuan to devalue, China policy makers concede economy needs a boost

Weaker yuan: A file picture showing an employee counting 100-yuan notes in a China bank. With the escalating trade war giving Beijing fewer reasons to maintain yuan stability, analysts expect the currency to continue to weaken. — AP

SHANGHAI: China’s abrupt devaluation of the yuan this week is an acknowledgment from Beijing that its domestic economy needs help, a vulnerability that Chinese policy makers have played down during the escalating trade conflict with the U.S.

The yuan’s slip to below 7 per U.S. dollar put the Chinese currency at its weakest point since 2008—and aligned it closer to economic trends that have pushed growth near quarter-century lows. The currency’s fall of about 3% Monday in offshore trading hit global markets hard as investors concluded Chinese policy makers, who influence the yuan’s exchange rate, might be giving up hope of putting to rest a trade fight with the U.S. that has dented global commercial confidence.