How frustrating. Two markets for the same asset – the renminbi – have produced a classic arbitrage, but only a handful of companies can take advantage of it. The dollar is worth Rmb6.398 in the onshore, tightly controlled market. In Hong Kong’s fast-growing offshore centre, it has spiked to Rmb6.457. The spread between the two rates has narrowed slightly from a record last week of 1.9 per cent but at 0.9 per cent, it is well above its 0.3 per cent average for this year.

The question for nearly everyone is “where next” for the offshore currency since only companies with strict documentation proving a business need can use the arbitrage to repatriate offshore renminbi. The general move partially mirrors the scramble back to dollars seen elsewhere, notably in the Korean won and Brazilian real. Add to this growing investor fears that China’s own slowdown is quickening pace and there is reason to suspect the new gap could persist for some time.

More specifically and perhaps more alarmingly, there is a suspicion that Beijing could freeze the renminbi as it did in July 2008, to shelter its domestic markets from the rising market turmoil. By and large, this worked. There are even suggestions that this time, it could force the renminbi lower to offset the dollar’s gains. This seems much less likely. Even in 2008 as its exports cratered and the dollar soared, it stuck with a freeze, not a revaluation.