"Our initial take was that this was primarily an effort to make the yuan, on paper at least, much more market-driven. The small devaluation that came with the move was probably welcomed, but not the main goal."

Zhu Ning, deputy dean and professor of finance at the Shanghai Advanced Institute of Finance, however, thinks a certain level of depreciation could be beneficial in the current climate.

"If the government wants to go even looser with its monetary and fiscal stimulus packages, there is always a risk of creating asset bubbles. A depreciation would let some air out of these because foreign capital would be less enthusiastic about plowing money into the Chinese stock market and housing market," he says.

Fears about the yuan and the Chinese economy have caused great nervousness among commodity-producing countries, particularly in Africa.

The Bloomberg commodity price index was already at its lowest in 13 years and fell sharply again with news of the depreciation, from just over 92 on Aug 11 to 88.60 on Aug 20.

Michael Power, a global investment strategist, at Investec Asset Management, based in Cape Town, thinks there has been an overreaction.

"The recent acclimatization of the yuan to a more free-floating status - for that is the essence of what has happened, even though many short-sighted commentators have rather hysterically dubbed it a devaluation - will have some impact on commodities and, especially, oil-exporting African nations, and it will be negative," he says.

Power, though, thinks some African countries will benefit from lower commodity prices.

"There are actually more oil-importing countries in Africa than exporting ones, which is often overlooked."

One of the major reasons why there was such a huge global reaction to China's move was that it was seen as an emergency measure to revive the economy.

Factory output figures and retail sales have been disappointing. In July, exports fell year-on-year by 8 percent.

The move was seen as an attempt to boosts exports, as one lever in the government's attempt to meet its 7-percent GDP growth target.

Evans-Pritchard thinks this explanation never actually made sense.

"They never really needed to resort to using the currency for this end. The reserve requirement rate is just 18.5 percent at the moment, and they could bring that right down to single figures if they want to. Only when that gets into single figures am I going to get worried they would be playing their last card."

Many believe the stimulus measures the government have so far put in place - regardless of the exchange rate move - are enough to deliver targeted growth in the second half.

These have included four separate cuts in interests rates, reduction of the RRR, supplementary lending to the banking system, and the sanctioning of up to 1 trillion yuan ($156 billion; 141 billion euros) in the issuance of bonds for local governments to finance debt.

Magnus, at Oxford University, believes these measures add up to about 1.5 percent of GDP.

"I think this suggests the underlying growth of the China economy is now at around 5.5 percent."

With the potential of a depreciating currency, the big risk for China is capital outflows.

Analysis by the Financial Times, published on Aug 18, that net capital outflows of 19 emerging market economies, of which China was the most significant, had reached $940 billion in the 13 months to the end of July led to heavy falls on the Shanghai Composite.