they devalue the american dollar in china is another way of putting it your dollars goes a shorter distance there then before, and as they push for this more and more goods made in china will be more expensive here, and we have inflation, however american companies want to sell more american good to china wishing that the chinese will buy with their yuan being stronger will buy more of our goods but what if they dont and buy european or japanese or even latin goods instead. This will put pressure on inflation and the fed will have to raise interest rates that will put us in another recession, but if we strengthen the dollar we can buy good from china cheaper and be the middle man and sell to the europeans and the rest of the world from china, because we can and is manufacturing from their in the first place.
Our dollar is not dependent on the China dollar. Its dependent on our escalating negative balance of payement and growing Federal Debt. Both of which needs correction. A sizeable VAT tax on consumption is needed to reduce consumption. Sure it will cause some financial problems but who needs 3 TV's, countless shoes, clothes until the closets bulge and the list goes on. We need a sound dollar as you have pointed out.