Here's your answer: http://www.nytimes.com/2010/03/15/opinion/15krugman.html?hp
It's from a liberal, pro-intervention in Chinese currency point of view. But this guy did win a Nobel Prize in economics.
Basically, in layman's terms, if China can keeps its currency devalued through government intervention, you see "Made in China" stickers everywhere because the stuff is cheaper on world markets. It also means that China accumulates vast reserves of foreign currency (currently almost a trillion in U.S. dollars alone) because its trading partners are sending much more money to China than China spends on its partners' goods.
The U.S. has been trying to get China to let the market determine the Renminibi's value for years. It won't happen. China is obsessed with internal security (for good reasons) and they feel like they have to keep people employed and their economy growing through the export market, even if it means devaluing their currency's global purchasing power.
Critics of the Nobel Prize in Economics allege that it is highly biased because its selection committee is made up exclusively of central banking ideologues.
http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences#Controversies_and_criticisms
I don't doubt that Krugmann's clever, but I think his very extreme axioms have blinded him to much of reality.
I don't think the proposition that China is engaging in currency manipulation by pegging its currency to the US dollar (instead of allowing it to float freely as other major currencies do) is in any way controvertial, regardless of one's ideological perspective.
And I'm not saying that just because I'm a huge, huge (HUGE!) fan of Paul Krugman! ;)
