When China intervened to limit its stock market slide in July, it was lambasted for a heavy, ham-fisted approach. Beijing did not garner many plaudits either for its handling of the renminbi devaluation .

But investors underestimate China at their peril: last week the embarrassing gap between onshore and offshore renminbi rates against the dollar suddenly vanished via suspected intervention. Policymakers then went off for a week-long public holiday, leaving the offshore market to adjust to the new reality in a virtual vacuum.

There are two schools of thought on the August devaluation and changes in how the renminbi is managed. The first is that it was a bungled salvo in the sporadic currency wars between exporters, and spoke to the domestic economy being far weaker than official data suggested. The second is that the People’s Bank of China was caught off-guard by the reaction to its new regime because it did not realise the scale of international scepticism about its economy. In this scenario the changes were in fact little to do with economics on the ground and more to do with pleasing the International Monetary Fund as part of Beijing’s bid for the renminbi to become an official reserve currency.