Deja vu strikes ominous chords

Hong Kong

FOR the second time in less than six months, market turmoil in China is rattling the rest of the world. As in August last year, the trigger is a sudden slide in the value of the yuan, which in turn has dragged down domestic stocks. Though the cause of the selloff is uncertain, the implications for the rest of the world are ominous.

The Chinese currency is down 1.5 per cent against the US dollar in fewer than four full days. That's only slightly less than the supposedly one-off depreciation that surprised global investors last summer. The latest slide has triggered a sell-off in Chinese stocks, twice activating new "circuit-breakers" which suspend trading when the benchmark CSI 300 index moves more than 7 per cent. On the morning of Jan 7, the market closed within half an hour of the opening bell.