Trade: Is China manipulating its currency?

Politicians and pundits constantly claim that China is manipulating their currency, to our detriment. Professor Mark Perry at the indispensable Carpe Diem blog makes a number of points to refute these claims, including this one . . .
It's a strange use of the word "manipulate," which means:
a. "To influence or manage shrewdly or deviously."
b. "To tamper with or falsify for personal gain."
In this case the "manipulation" is to America's advantage and China's disadvantage, because the undervalued yuan and overvalued dollar makes Chinese goods cheaper and more affordable for American consumers and companies, saving us billions of dollars, and making us wealthier and China poorer. It would be like accusing Wal-Mart of "manipulation" for offering "Everyday Low Prices," and saving Americans billions of dollars??
And, as usual at Carpe Diem, there's a great graph.

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