In recent weeks, the phrase “currency war” has been used liberally. Let us hope this is a passing fad: it is inappropriate, and actually a fiction. In truth there are no real currency wars, just normal currency markets responding to events.

Let us review the facts. The Chinese currency has risen by about 20 per cent against the US dollar in the past five years.?About a tenth of this appreciation has happened since this summer. On a trade-weighted basis the renminbi has risen by about 14 per cent over the same time. Whichever measure you use this is quite a move, and one with powerful consequences.

For those minded to look, there is plenty of evidence that China’s economy is already changing for the better. Take its October trade data. The massive increase in the size of its trade surplus – which rose to $27.1bn – got all the attention. But in the first 10 months of 2010 China’s surplus has only been around 3.2 per cent of gross domestic product, around a third of its peak before the financial crisis.