The devaluation of the American dollar does not just affect Chinese exports to the US. China has more than 2 trillion in dollar reserves which she has bought to keep the dollar artificially up....it is like the value of your house sinking after you paid all the money.
The Yuan is linked to the dollar...so when the dollar will sink either China has to raise the Yuan which will make her exports more expensive all over the world not just to the US or try to lower the Yuan..which is where the currency war will start.
The other way around. You've got it flip-flopped.


(Almost 70 to 80 % of current Indian GDP), as of March 2010 (Source: Federal Reserve's G.19 report on consumer credit, March 2010)