Several of China's heavyweight State-run media outlets have recently run articles saying that speculators betting on yuan depreciation are expected to suffer huge losses and may face severe legal consequences.

It came after billionaire investor George Soros said last week he had been betting against Asian currencies while buying US Treasuries, so the State-run media articles have been widely regarded as the Chinese government's response to Soros' words and a possible warning against massive short selling by international investors.

However, the market has perhaps read too much into both the articles and into what Soros said.

Soros did not say he had targeted the yuan specifically in recent weeks and it is inappropriate to draw simplistic conclusions that investors betting against Asian currencies caused the yuan's recent tumble.

Besides, State-run media outlets like the Xinhua News Agency did not mention Soros in their reports or suggest that the Chinese currency has been affected by attacks by international funds.

Was the recent weakening of China's currency caused by a hostile attack by international funds? This shouldn't be the primary viewpoint. Although foreign investors, particularly Soros, played a big role in currency speculation in Asia during the Asian financial crisis, so far there is no evidence showing international funds have repeated what they did in 1997 to attack Asian currencies. Besides, the yuan, which is now a major international currency, is neither the Thai Baht nor the Hong Kong dollar, which were attacked back then and are easier to manipulate for international financial tycoons.

Clearly, conspiracy theories can not help us analyze objectively why there has been a depreciation in the yuan. It is mainly a result of the US interest rate hike in December and the current yuan exchange rate reform to make the yuan's daily fixing rate more responsive to market forces.

Even though more frequent volatility may be seen in the yuan's exchange rate against the dollar in the future, the currency will likely remain strong against a basket of other major currencies.

The Chinese authorities have a variety of policy tools to maintain economic and exchange rate stability, and the warning by State-run media outlets doesn't mean the government will take drastic action to set obstacles in the way of foreign investors participating in yuan trading.

However, it is the Chinese government's responsibility to crack down on illegal speculative behavior and it is appropriate for Xinhua to indicate that such activities will have possible legal consequences.

The authorities may need to define clear boundaries between illegal and legal speculative behavior and continue their efforts to increase policy transparency to avoid misinterpretations of their true policy intentions.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn