[po]

Yeah it's confusing... You're right that a devalued Yuan helps their exporters. Of course, too much is a bad thing too. They want to keep their currency within a narrow range relative to the USD. They were recently making a move to do that which sparked all of those 'currency war' headlines:

http://www.wsj.com/articles/china-moves-to-devalue-the-yuan-...

They did that as a 'one-off thing' but it seems like everyone interpreted it to mean their economy was actually really in bad shape so investors started to get out before their assets dropped more. Then the stock market went to hell and now they're surprised that everyone is spooked:

http://www.reuters.com/article/2015/08/27/us-china-yuan-idUS...

So basically they sparked a bit of a panic and have been throwing levers to try to reassure everyone but each thing they try seems to just make it worse.

At least that's what I'm seeing. :-)

[exelius]

Yeah the general rule with currencies is that as long as they're not too volatile, they can go up or down without huge implications to the economy.

The other thing to realize with the Chinese stock market is that even though it dropped something like 50% in 2 months, it's basically flat since January. If you look back to 1 year ago, it's still up 40%. You don't get 250% growth in 6 months without an accompanying correction cycle. The biggest problem with China right now is that it's high on potential, but nobody knows what the right value should be. So it will continue to be volatile like this until there's a better idea of if Chinese companies are creating real economic value or not and to what degree.