Al Jazeera: China warns against US currency bill

Belen forwarded along this news item that gets right at what we've been talking about in class:

China's foreign ministry has said it "firmly opposes" a bill pushed by the US Senate that will allow the country to impose duties on countries that undervalue their currencies. In a statement posted on China's official government website on Tuesday, the ministry said the US was "using the excuse of 'currency imbalances'" to adopt protectionist trade measures that violated World Trade Organisation rules… The Senate voted on Monday to advance legislation designed to press China to let its currency, yuan, rise in value.

Think about why China might be so concerned about keeping their currency cheap, and why the United States (or certain constituencies within the US) would have an interest in making the Chinese currency more expensive.

Finally, is this a good idea? Why or why not?