Let's see, they hold a fire sale on their us currency holdings. Once they start, the price drops and all of those assets they hold drop in value. Now, since their banking system is already at a non-performing loan ratio of about 25% this just makes things go even worse. Then as the cost of their goods become more expensive in the US market, Wal-Mart and others actually go back to selling (cheaper) American products. Since they have caused a recession in the US, there are less people buying things anyway so their sales further tank.
Yes, it would hurt us, but like Hatty said, it would be shooting themselves first to shoot us too. Those folks are calculating, not crazy. And the last thing they want is American people actually looking at the "Made in" label on stuff and thinking how much they hate China.