Doubts over significance of renminbi policy move

Last week China's central bank announced it would introduce flexibility in the exchange rate of the renminbi, removing its peg to the dollar and allowing the currency to appreciate.

The US Treasury Secretary Timothy Geithner has previously slammed the Chinese authorities for their stubborn refusal to remove the peg. Geithner triggered a spat between the two nations earlier this year when he accused the Chinese of being "currency manipulators". The move by China is indicative of policymakers' confidence in the economy, which may drive markets up, argues Mark Williams, a senior China economist at Capital Economics. "The market reaction is likely to be driven by two things," he says. "First is the expectation that a stronger currency will boost China's imports, help...