China’s stock and currency market turmoil is once again sending financial shockwaves around the world. Equities slumped throughout Asia, in Europe and the US following Chinese share price plunges that prompted a second trading suspension this week. Indicating the widespread concerns, George Osborne, the UK chancellor, named China as part of a “dangerous cocktail of new threats” to global prosperity.

The angst radiating from the world’s second-largest economy is in some ways an echo of last summer’s rout. Investors worried then that a stock market slump and a devaluation of the renminbi betrayed deeper faultlines in the Chinese economy than were apparent to outsiders. The same is true today. Massive net capital outflows, which hit a record of $221bn in the third quarter of last year, appear likely to have accelerated in the fourth quarter. The rush by Chinese companies and individuals to take their money overseas is depressing both domestic stock prices and the renminbi.

Some observers attribute the currency’s slide to a four-year low against the US dollar yesterday as motivated by an intent in Beijing to pursue competitive devaluations on behalf of its struggling exporters. However, it seems unlikely that the People’s Bank of China, the central bank, is intentionally stoking a “currency war”. Last month alone, it sold some $113bn of its foreign exchange reserves to stabilise its depreciating currency, according to estimates by Capital Economics, a research firm.