China's surprise devaluation is sure to stir up fear and loathing among the world's economic populists. (Keep your eyes on Republican presidential candidate Donald Trump's Twitter account.) But the move deserves praise, not condemnation. It might even prove a boon for world growth.
Beijing spent much of the last year propping up the yuan to combat capital outflows, avoid debt defaults and win a place among the International Monetary Fund's five reserve currencies. But with growth sputtering and deflation looming, China has now reversed course, cutting its daily reference rate Tuesday by 1.9 percent, the most in two decades. The Chinese government has effectively admitted that risks are accelerating in the world's second-biggest economy.
Politicians in the United States are sure to call the devaluation a threat to American jobs, and politicians in Japan will bemoan its effects on their deflation fight. But it's important to keep a sense of perspective. China has called this a one-time fix designed to push the yuan toward a more market-determined system, in accordance with the International Monetary Fund's wishes.