The wobbles in China that rocked financial markets this week have not only cast doubts over the economy, they've also shaken confidence in policymakers' ability to stem the volatility.
For two decades, China's frenetic growth has been the source of the world's envy, with investors placing faith in the ability of policymakers to help transform China from a manufacturing-led powerhouse to a consumer-driven economy . As the economy stutters and regulators scramble to contain wild moves in the yuan and stocks, analysts are calling out what appears to be a ham-fisted approach to managing market volatility.
"Market volatility this week suggests that nobody really knows what the policy is right now. Or if the government itself knows or is capable of implementing the policy even if there is one," DBS said in a currency note Friday.
"The market's message was loud and clear that more clarity and less flip-flopping is needed going forward."
China-listed stocks plunged this week, with trade suspended completely in two sessions after the CSI 300 index dropped more than 7 percent, triggering a circuit breaker meant to limit market volatility.
The China Securities Regulatory Commission (CSRC) suspended the circuit-breaker system, implemented for the first time on Monday, before the start of trade Friday.
The quick regulatory flip-flops spurred a lot of derision among social media commentators.
"The CSRC all treated us as experiments to make history. When it failed, it concluded with 'lacking experience,' and that's it," Weibo user Li Hua posted. "I strongly call for resignation of related personnel who designed this policy! There's no cost of failure so that decision makers can do whatever they want."
Another factor weighing on faith in China's regulators: Policy makers at the central bank, the People's Bank of China (PBOC), have tinkered again with its currency without providing much indication to the market about its endgame.
On Thursday the PBOC allowed the yuan to fall by the most in five months, to the lowest level since 2011.