The eurozone, Japan and many other nations have sought to push their currencies lower in recent years to juice their economies, leading experts to talk of a currency war.

With its yuan devaluation this week, China appears to have joined the conflict in earnest. The currency has dropped 3 percent, hitting a four-year low. The dollar traded at 6.3982 yuan Thursday, up from the pre-devaluation level of 6.2097 yuan Monday.

"When people start talking about 'currency wars,' it's never a good thing," Michael Farr, president of esteemed money-management firm Farr, Miller & Washington, told USA Today.

"China's move to devalue its currency could be the first shot across the bow toward a wider currency war."

A weaker currency helps a nation's economy by boosting its exports, as the falling currency makes the exports cheaper in foreign currency terms. But if many countries try to devalue at once, the effect is nullified.

"A currency war is really a race to the bottom, whereby one country after another devalues their currency to gain an export price advantage, creating too much supply and not enough demand, which elevates the risks of even more anti-growth protectionist measures," Joe Quinlan, an investment strategist at U.S. Trust, told USA Today.

"Currency wars are anti-growth and deflationary."

Meanwhile, experts agree it was China's sluggish economic growth that led to the yuan devaluation.

China's government reported that its GDP expanded 7 percent in the second quarter, conveniently reaching the official target. But most economists believe the true figure is much lower—perhaps 3 to 4 percent.

They note China's National Energy Administration reported that the nation's energy consumption rose just 0.7 percent in the first half of 2015 from a year earlier. That's hardly consistent with 7 percent growth.

“To be honest, no one has a clue where the economy is, and I don’t think that it’s properly measured,” Viktor Szabo, a senior investment manager at esteemed Aberdeen Asset Management, told The New York Times.

“Definitely there is a slowdown. You can have an argument about what level it is, but it’s not 7 percent.”

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