Yuan move may mean China is wary of economic shift

Washington

TO understand China's surprise currency devaluation, you need context.

China is engineering a major economic transformation - or, at least, trying. For years, it relied upon export-led growth and massive investments in housing, infrastructure (roads, rails, ports) and heavy industry (steel, glass, aluminium). This economic model now seems spent. World trade is weak. Over-investment in housing, infrastructure and industry has left gluts. So China is switching its engine of growth to consumer spending on services and light manufacturing.