It keeps their products cheap relative to other countries so they are able to sell their products maintaining an export driven economy while making ours expensive for them to purchase.

This leads to the trade deficit and keeps our money flowing in their direction instead of letting the natural supply and demand determine prices.

 

Yes, by keeping the value of exports low, they are essentially underbidding other countries for product cost.

 

But if we debase our currency, then it counteracts China's currency peg, their export demand structure, and devalues the bonds that they hold.

Normally, our economy would see a shift from jobs abroad, to jobs at home. However, the sheer amount of legislation at home is actually stifling this process.