Yuan devaluation breaks last line of global economic defence, warns top economist

Stephen King of HSBC warns the world’s financial system may not survive another crisis without China as a backstop

China’s devaluation of the yuan reveals that the global economy will be without stabilisers if another crisis strikes, economists have warned.

The decision to cut the yuan’s value showed that Beijing had become scared, they said, suggesting that the world’s second-largest economy is in a far more precarious position than outsiders had assumed.

Stephen King, a senior economic adviser to HSBC, said that since the crisis China had done more than any other to provide “the heavy lifting to support global economic growth”, but that it may not step in to keep the world’s financial system afloat again.

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