Not sure I entirely buy the "war on the dollar" thesis. Drops in production (supply) in China are largely due to lagging consumption (demand) in the U.S. Sinking the dollar would harm the Chinese economy almost as much as it would the U.S. economy, and could even end up sinking Communist Party rule.
China has pegged its currency to the dollar so as to make its exports more competitive, but is under pressure both internally (from a growing middle class) and externally (from the U.S. and Europe) to increase consumption and imports. The U.S., on the other hand, wants to increase production and exports. Doing either, however, could exacerbate unemployment in China and inflation in the U.S.
