The exchange rate of RMB has stabilized after the recent RMB devaluation engineered by the government. However, the market is still worried whether China will continue to use currency devaluation as an "economic weapon" and join the currency war of its own accord.

Anbound's research team points out that judging from the China’s usual practices in relation to its exchange rate policy and the features in its policy making, China will not join the global currency war by engaging in competitive devaluation.

However, the use of exchange rate devaluation as a monetary tool is now officially part of the central bank’s reserve policy, China has retained the 'deterrent’ effect of the monetary tool.