If the renminbi had “cracked seven” — or po qi as falling through seven to the dollar is known in Chinese — in late 2016, it would have been a sign that Beijing was losing its grip on the carefully managed currency and possibly the world’s second-largest economy as well. But when that line was finally crossed on Monday morning, after flirting with it for almost three years, all was calm in Beijing. 

It was no coincidence that the move came just days after US President Donald Trump threatened to impose punitive tariffs on all Chinese imports next month. Allowing the renminbi to crack seven is a carefully calculated gamble by the Chinese government that it can use the currency to ameliorate the worst effects of its ongoing trade war with the US without triggering capital flight. 

The main difference between late 2016 and now is that three years ago Beijing was struggling to shore up domestic and international confidence in the renminbi, after a prolonged bout of market and currency turmoil.