A return to the 1930s?
The notion of beggar-thy-neighbour trade loom large in the public imagination.
In the West, the issue has been given prominence by howls of derision from Washington over the motives of an apparently mercantilist Beijing.
In 2012, eventual losing Republican party presidential candidate Mitt Romney vowed to declare China a currency manipulator on his first day in office.
Following the PBOC's move, a chorus of voices in the US jumped to proclaim the beginning of a fresh round of currency warfare.
Current GOP presidential hopeful Donald Trump was emphatic: "They're destroying us. They keep devaluing their currency until they get it right. They're doing a big cut in the yuan, and that's going to be devastating for us."
Industry chiefs in the emerging world urged their governments to protect them from Beijing's smash and grab of the world's export share. India's largest trade body feared its exporters would become "collateral damage" in a global race to the bottom.
But with the dust now settled on China's gambit, the "devaluation" seems barely worthy of its name.
"China's devaluation was puny", says Benjamin Cohen, professor of International Political Economy at the University of California.
"It is clear that overblown headlines about the renminbi's "plunge" were woefully misleading. Had China really wanted to grab a bigger share of world exports, it is hard to imagine that its policymakers would have settled for such a modest adjustment," says Cohen.
On a trade-weighted measure, the renminbi has strengthened by 50pc since 2004. The one-off weakening will barely make a dent in this relentless appreciation. Beijing's reticence to let the renminbi slide was also made immediately obvious. Authorities were forced to buy up the currency and stem the decline mere hours after it had moved to the new foreign exchange regime.
In the 1930s by contrast, developed world economies underwent average devaluations of a magnitude of 10pc having abandoned the defunct Gold Standard.
Plenty of reasons have been proffered over China's "true" motivations. Many have suggested the PBOC is playing a "smoke and mirrors" game to slowly engineer a more competitive yuan.
But the most plausible motive is also the most prosaic.
China has long sought official reserve currency status, as bestowed by the International Monetary Fund through its "special drawing rights" basket of currencies. The dollar, sterling, yen, and euro currently make up the SDR.
Liberalisation of the renminbi, so it can move towards a more market determined value, has long been a pre-requisite for its inclusion in the basket. In shifting from a currency peg to a managed float, Beijing took its first incremental steps towards becoming an official global reserve.
"Long-term thinking has landed China in some short-term difficulties", says Joshua McCallum, head of fixed income economics at UBS global asset management.
"This is less a currency war than a currency peace offering" he says.
"If China wanted to gain a competitive advantage compared to where it is now, it would let the currency float and watch it drop by 10pc or more. But even if China did that, no self-respecting economist would call it a currency war if the markets were determining the price."
Retaliatory efforts by neighbouring economies should also be taken with caution, say analysts.
Vietnam's central bank was among the first to weaken its currency, the dong, by 1pc and widen the range of its trading band with the US dollar. But the intervention remains an exception rather than the rule in east Asia.
Hanoi's central bank is moving towards greater exchange flexibility given its dollar peg as an interest rate hike from the Federal Reserve looms. Despite the sensitivity of Vietnamese exports to China, the currency has still fallen by far less against the redback than those of neighbouring economies.
A dud tool?
Currency war agitators would also do well to note that weakening exchange rates are far less effective in providing competitive boosts to exporters, as was recognisably the case in the inter-war period.
A comprehensive study of 46 economies by the World Bank found that in the wake of the financial crisis, episodes of "large depreciations appeared to have had little impact on exports".
The transmission from lower exchange rate and cheaper goods has been mudddied by moves towards high-end production which rely on global supply chains. As more goods are no longer solely produced in a single economy, the effects of devaluation have dampened. China is no exception as it seeks to shift towards higher end production, ending its reliance on flooding the world with cheap 'Made in China' goods.
There is no greater cautionary tale for the "dud tool" of currency depreciation than Beijing's nearest economic rival, Japan. The yen's real effective exchange rate has fallen close to a 40-year low on the back of massive quantitative easing engineered by prime minister Shinzo Abe. To date, this has failed to revive the fortunes of the third largest economy.
Currency warfare claims also ignore the domestic political and economic dynamics that are weighing on the minds of the Politburo.
Authorities are wary that a predatory gambit to drive down the renminbi would cripple Chinese companies who have loaded up on dollar-denominated debt. It would also attract widespread international opprobrium, derailing the regime's efforts to develop in to rival the US in the global "soft power" stakes.
Yet, even if the world has not entered a ferocious age of currency warfare, complacency should not deter policymakers from learning the biggest lesson of the 1930s - the need for coordinated action to revive global growth.
"The best thing now would be for policymakers to try and sit down together at a new Bretton Woods and ask 'where do we go from here?'" says Michael Every, head of market research at Rabobank in Hong Kong.
"Independently, every country is looking at their own weak economies but all are failing to grasp nettle of structural reform," he says.
A world of depressed domestic demand and flagging world trade are the perfect conditions for the zero-sum game of competitive devaluation to take hold. But it is unlikely to be China that fires the starting gun.
