So do we want the Chinese to manipulate their currency or not?

aactually, china has already slowed down its purchase of dollars... see http://www.nytimes.com/2009/01/14/business/worldbusiness/14yuan.html?scp=1&sq=china,%20dollars&st=cse and http://www.nytimes.com/2009/01/08/business/worldbusiness/08yuan.html?scp=3&sq=china,%20dollars&st=cse

(what's really amazing is that there continues to be unprecedented demand for US debt instruments despite the slowdown in China's debt purchases.)

But to answer your question, no we don't want china to manipulate its currency. China's willingness to soak up dollars was a factor in creating financial crisis -- it kept t-bill rates (and therefore interest rates) low, and encouraged asset inflation. China's policies also hid a lot of the damage Bushco had done to the economy --- stagnant wages and low paying jobs were a lot easier to take with all those chinese imports flooding the country (I mean, without cheap Chinese imports, Walmart would be just another discount chain.)

....selling me softly with his yuan.....