China May Be Preparing To Deploy Economic 'Nuclear Option'

China has been buying up commodities at a rapid clip, prompting analysts to wonder out loud whether Beijing is preparing to choose the economic "nuclear option."

"China is preparing for something major. That seems increasingly obvious judging from the stockpiling of important resources. Could it be that they are preparing a major one-off devaluation of the CNY?" Andreas Steno Larsen, CEO of Steno Research, wrote last week.

Going "nuclear" and intentionally devaluing the Chinese yuan could boost exports by making its goods cheaper and more competitive—but not without serious repercussions, including riling trade partners and worsening the country's trade war with the United States.

Accumulating resources like gold and oil beforehand could provide some financial security and bargaining power, helping to stabilize the economy against potential negative effects of a devaluation, such as increased import costs and inflation.