The volatility in China’s equity and currency markets in the first week of 2016 was reminiscent of August 2015, but more serious.

Even though the Chinese equity market doesn’t matter that much fundamentally to China or to the global economy, financial policy and the drip-feed depreciation of the renminbi matter a lot. There is a rising anxiety about the credibility of policymakers and regulators, and about the state of the economy, the reform agenda and now a looming credit crisis.

Even though December’s early readings for both manufacturing and services were disappointing, infrastructure and other policy support programmes have helped moderate the downtrend in growth. The beleaguered real-estate sector has experienced higher sales, even higher prices, in large cities, and some tumbling industrial indicators have stabilised. Yet we should not be distracted.