Chinese weapons against US tariffs could turn against its growth

And the risks inherent in the subsequent devaluation of the yuan mean that this strategy could seriously turn around.

"That's what they're afraid of," said Josef Jelinek, senior analyst in China at Frontier Strategy Group, during a meeting with CNBC's "Street Signs Europe" on Wednesday. "On the one hand, a depreciated currency helps them offset some of these tariffs, but if it falls too fast, investors may be scared and see huge capital outflows, which is exactly what They do not want now. "

In 2015, China devalued its currency by about 4% in a matter of days, which represents the largest decline in the yuan in 20 years and the market reversal. The resulting capital outflows led Beijing to spend $ 1 trillion of its foreign currency reserves to support the yuan.

Indeed, on August 24 this year, the People's Bank of China reintroduced its counter-cyclical factor, which lends itself to supporting the value of the yuan in the face of the worsening trade war. This could be "seen as a coded signal for a CNY (yuan) strengthening policy," Mizuho Bank said in a note on Monday. The decision could even be "a gesture by the Chinese authorities vis-à-vis the United States," said an Asian researcher at the South China Morning Post.