China’s announcement that it is revaluing the renminbi and switching to a new currency regime based on an adjustable peg against a basket of currencies may prove to be a defining moment in global economic history. Yet for now its significance remains deeply ambiguous.

The initial step, a 2 per cent revaluation against the dollar, is of primarily political importance. China is signalling that it is willing to accept the system responsibilities that come with being a leading member of the world economy.