TOKYO -- Henry Paulson, U.S. secretary of the treasury under President George W. Bush, frequently mentions Wang Qishan, China's anti-corruption czar and a close aide to President Xi Jinping, in his memoir.
Wang, who currently serves as secretary of the Central Commission for Discipline Inspection, was vice premier in charge of finance and commercial affairs when the Lehman shock hit in 2008.
In his book, Paulson said close ties with Wang and a number of other key officials were of enormous help to the U.S. in retaining its creditworthiness, revealing that he frequently spoke to Wang while trying to deal with the ensuing crisis.
The U.S. needed to issue huge amounts of government bonds to ride out the shock; Beijing readily accepted them.
China even surpassed Japan as the world's largest holder of U.S. Treasuries in autumn 2008. Wang's move in part prevented the dollar from plunging in value.
All this makes President Trump's claims of currency manipulation understandably hard for Beijing to swallow.
China now finds itself selling dollars to prevent a plunge in the yuan rather than devaluing it, said Chi Hung Kwan, a senior fellow at the Nomura Institute of Capital Markets Research.
The yuan fell nearly 7% against the dollar in 2016, reflecting concern about China's economy. The currency would have fallen even further had it been left alone.
But Beijing has been able to sell off the dollars it obtained through the U.S. Treasuries purchased after the Lehman shock. As a result, Japan once again became the world's biggest holder of U.S. Treasuries for the first time in nine years at the end of 2016.
China's foreign currency reserves decreased by $1 trillion in just two and a half years from their peak in June 2014 and fell below $3 trillion in January.
A weaker yuan is not all bad for China because it helps increase exports. But the Chinese leadership now desperately needs to maintain the currency's value; it has to prevent a swelling of foreign-currency debt in the corporate sector and faster inflation.
In addition, Beijing is well aware that a weaker yuan will lead to the collapse of trust in China itself, said Junhua Wu, counselor at the Japan Research Institute.
Chinese people consider it risky to hold too much yuan and are keen to buy dollars, fearing that yuan-denominated assets may suddenly be confiscated amid the ongoing anti-corruption campaign, a Chinese corporate manager said.
Wang helped the dollar out of a tight spot. It is ironic that his campaign is now causing capital flight and becoming a contributing factor to the yuan's deprecation.
Asked if the deprecation of the yuan can be stopped, a retired Bank of Japan official said the only option remaining is to devalue the currency by 15% to 20% so that market players will expect no further decline.
Devaluation on such a scale is like a dangerous drug, but cannot be ruled out if Xi and Trump for some reason decide to start working together.
But for now, the outlook for the yuan appears every bit as chaotic as the current U.S.-China relationship.