more than that, an actual re-balancing between the yuan and the USD would also benefit China. China would have to move from an export dominated economy and allow their own impoverished citizens to become consumers of the goods that they make. At one point, after the credit crunch, China was giving washing machines to villages that had no electric power, to keep the factories going.
I'm not saying that this kind of re-balancing would be painless, far from it, and it's just possilbe that if this occured eight year olds would no longer have their own cell phones, and the big box stores, which carry merchandise made in countries where people work under horrible conditions, & live thier lives in slave like conditions, would get a lot more expensive.
We would be making a lot more things if we had been able to export more and American companies had a level playing field. If things change, and jobs do come back to the US, a lot of unemployed people would be glad to have them.
Trade imbalances that occur because of currency manipulations correct faster than you would think, look at what happened after the plaza accord, and the yen was valued at a somewhat more fair forex rate. Before that, the Japanese were announcing that europe would be their botique, and the us would be their granary.
China had a negative trade balance one quarter ago, I think, and that was just because of a slow US economy, what do you think it would be if the yuan was allowed to float?
We have literally allowed China to pick our pockets for years, and it's way past time for it to stop. It may be too late to do it without a big disruption, but that doesn't make doing it less important for the future of the US.
We never asked the world to trade in our dollars, they did so because we were trusted. From what I've read, people around the world still trust the buck for trade, attempts to move trade to other currencies have failed so far.
We have badly abused our role as reserve currency, but china has manipulated it's currency shamelessly, done so by aquiring US debt (that is what keeps the yuan where it is, the Central bank of China owns USD and bonds) and then complains because the country they rob is finally coming to it's senses. Did you really think they were buying our bonds because they thought we were going to pay them back?
There is a whole lot of just plain bs floating around- it's pretty har to find the biggest liar or the shortest midget.