Folk wisdom suggests you shouldn’t start an argument with someone who buys ink by the barrel. Investors should think twice before making bets against someone with several trillion dollars in foreign exchange reserves.

That’s the lesson for speculators shorting the Chinese yuan this year. Despite escalating trade tensions leading to a steep tariff hike on $200 billion in Chinese goods in May, and a weak Chinese economy, the yuan is roughly flat for the year at 6.87 to the dollar.

Luckily...