Poor growth, soaring debt and a rating downgrade. In most parts of the world such a cocktail would spell bad news for the currency. But not so in China. Despite a clutch of negative headlines in the past week, the renminbi has instead strengthened to reach a fresh high against the US dollar.

The reasons to sell, on the face of it, look compelling. Last week, Fitch became the first rating agency to downgrade a Chinese sovereign rating since 1999, and warned that a credit binge in the country’s shadow financing system would ultimately require a government bailout. Those concerns were echoed when a senior Chinese auditor said that local authority debt was “out of control” and threatened to spark a financial crisis bigger than that caused by the US subprime bubble.

Then on Monday, China reported weaker than expected 7.7 per cent growth for the first quarter, prompting a scramble among economists to downgrade their full-year forecasts.