There was good news on Chinese exports this week. They surged for a second month, up 7.5 per cent in July over the same period last year. That was far more than expected. It was also a clear sign this vital economic sector appears well on the road to recovery, even without the yuan devaluation many so-called experts like to portray as essential. But yesterday saw signs that this encouraging trend has not yet spread to the rest of the economy. The growth rate for fixed asset investment plunged while deflation continues. Unemployment also continues to rise. These trends will only embolden those who make their living talking up devaluation. They have been predicting one for two years and want to avoid being proved wrong. That does not necessarily mean they know much about the subject. One popular story in the financial markets this week is that China will devalue on October 1, to mark the 50th anniversary of the People's Republic. Such predictions speak volumes about the ignorance of those who make them. Instead of being taken as a mark of a more open society, Beijing's increased willingness to tolerate a public debate on the issue is portrayed as supposed proof that devaluation is a certainty. That is far from reality. Those who matter still oppose such a step. Premier Zhu Rongji repeated his opposition to a visiting US Senator this week. China Everbright's new chairman, Liu Mingkang, even said the yuan may appreciate. Others think differently. The complaints of exporters may have been undercut by this week's encouraging figures. But the argument that it would help solve deflation remains more compelling. Yet the leadership seems firmly set on a different course. This was evident from a keynote speech by President Jiang Zemin highlighted in yesterday's mainland press. It placed renewed stress on overhauling state-owned enterprises. That issue has been dormant for the past year. Its revival suggests Mr Zhu's reformist policies have prevailed at the Beidaihe leadership summit. It may even signal interest in resuming talks on entering the World Trade Organisation. Beijing's position in these talks has been strengthened by a willingness to resist pressure for a devaluation. Having done so for two years, it is hardly likely to abandon this policy lightly. Nor is there much point, now that several regional currencies have rebounded. Some in the markets may wish to believe otherwise. But those who do so are blinding themselves to economic and political realities.