As has previously been reported both on this site, and elsewhere, it has been an interesting summer for the Chinese economy. And with an announcement coming today out of Hong Kong that seems to have surprised truly everyone, that trend continues.

Indeed, as is being reported by CNN Money and other sources, the Chinese government has moved to devalue the yuan, as the People’s Bank of China is allowing the currency to depreciate close to 2% against the US dollar they announced Tuesday. The purpose for doing this, of course, is to keep export prices attractive, as that sector of the Chinese economy composes about 19% of total GDP.

But of course, the concern here, as alluded to in the embedded video, is a currency war. If China, the largest exporter in their region, has now devalued their currency close to 2%, will other exporters like Viet Nam and Japan be forced to as well? Mr. Woo, in the video, alludes that the effects might be felt as far as European countries like Germany, who’s exports to China account for around 3% of their respective GDP.

China has announced though, that this is a one-time-only move, necessitated by a recent policy change that stipulated that the PBOC will no longer set a daily midpoint value on the yuan, instead setting the price according the previous day’s closing value.