system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What are the long term implications (especially for China) of China artificially lowering the value of their currency? How is it sustainable?
gpt
Artificially lowering the value of their currency allows them to produce cheaper exports, which means that they get more business from international buyers. This is especially important for China because their economy is heavily driven by their exports. However, despite being good for business, a devalued currency also means that ordinary Chinese citizens have less purchasing power, so they experience more poverty and a lower standard of living because of it. 

It is absolutely not sustainable. To borrow a phrase from an old professor of mine - "A devalued currency means the Chinese are not getting paid for their work. Yet." It's as if they are being forced to put a large chunk of their pay into a hidden savings account that they know nothing about. Only when the Yuan returns to its natural equilibrium can their pay be considered "fair". The longer their currency is devalued the larger the "value gap" becomes.

The long term implications are very hard to predict, and depend very heavily on how well the government manages the situation. If they just stepped back now and let the currency do its thing, the huge jump in manufacturing costs would absolutely crush Chinese industry and wreck their economy. On the other hand if they keep the currency low, the economy can grow too fast and lead to a crash. If the Chinese economy crashes, all bets are off. No one has any idea how a billion people would react to that, especially a group of people that haven't yet had the time to become comfortable with capitalism. 

At the end of the day the whole situation is an economic bubble, and we learned in 2008 how disastrous those can be. Hell, the entire world ground to a halt because of an economic bubble in US *housing markets*. Can you imagine the consequences of an economic bubble encompassing *all of China*?

Ideally the Chinese government will manage a steady decline for their currency with only small losses in their employment numbers, and people will grumble but get over it. That's certainly what everyone is hoping for, but it will require very precise and careful moves from the Chinese central bank.