Chinese central bankers must be grinning over their cups of hot tea.
In August 2015 the People’s Bank changed the way it manages China’s renminbi. The currency’s 2% overnight fall triggered a global stock plunge, as investors worried that China was using devaluation to rescue a flailing economy. When the smoke cleared, China promised to keep the RMB stable.
But the currency kept falling: The RMB is down 3% this year against the dollar, and more against a global basket of currencies. “It is hard to square the continued depreciation … with the official commitment to maintain broad stability,” Capital Economics chief global economist Julian Jessop observed recently. And yet investors have reacted with a resounding “meh,” with U.S. stocks doing especially well.
Currency manipulation is a political hot topic (ask any Trump voter), so why the collective shrug? In short, because it is traders who have sent the RMB sinking, not China’s government, and cheaper currency hasn’t had disastrous effects abroad.
For example, Chinese exports haven’t noticeably benefited from devaluation. They’ve been posting sharp declines all year, as China’s sales are hurt by weak U.S. demand and rising production costs. So much for a trade war.
Still, it’s clear that China’s currency liberalization, like its other free-market reforms, has been spotty. China just hosted a G-20 gathering in Hangzhou, but its trading partners will eventually want clearer proof that China plays fair.
Read More: What China’s Black Monday Teaches Investors One Year Later
A version of this article appears in the September 15, 2016 issue of Fortune with the headline “China’s Currency Falls. The World Shrugs.”