Hong Kong — Kevin Smith may not be the most famous China bear around, but he is certainly one of the most persistent. Despite watching his bets against the Chinese currency and stock market backfire since March 2016, the Denver-based founder of Crescat Capital is as sure as he has ever been that the country is headed for a major devaluation. Smith says the yuan could sink 70% over the next 12 months as China’s credit bubble finally bursts. While similar pronouncements from hedge fund titans including Kyle Bass and David Tepper routinely made headlines as China’s currency slumped through the end of 2016, Smith has far less company nowadays. Bears have largely gone into hiding as the yuan rallied 4.3% from its January low, buoyed by stabilising economic growth and a government clampdown on capital outflows. The average yuan forecaster tracked by Bloomberg now predicts a modest 3.6% drop by mid-2018. Smith is unbowed. In his latest note to clients on August 5 — about three years after ...
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