SINGAPORE (July 23): The foreign China bears are back. It does not seem to matter that they have been consistently incorrect in forecasting a Chinese economic collapse for the past 20 years. They are as determined as ever that this time, they are finally correct.

Former Australian prime minister Kevin Rudd warned that the trade dispute between the US and China could escalate into a currency war, which he claims China would lose.

He notes that the renminbi is Asia’s worst-performing currency, down 7% from its peak this year. The China bears nod their heads in agreement and conveniently ignore the Australian dollar, down 10%; the British pound, down 9%; and the euro, down 7.84% from their peaks against the US dollar this year. The impact of trade disputes is not confined to China and they affect economies that are much more fragile than China’s.

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