Exchange Rate, the value of money, and China's reserves

The previous post, which i flagrantly copied and pasted was so good that I thought I would expand on it a bit.
From that article, the conclusion was drawn that money of one country is of no real use in another country...somehow it must come back to its parent country in order to regain its value.
That is, if you took an Indian rupee and tried spending it in china, they would laugh at you. and if some dratted chinese guy came to my shop and tried waving remnebi in front of me, I would probably kick him out of my store. (obviously chivalry dictates that I would not kick a Her out of the store).
The article also did a spectacular job of explaining what exports actually mean. It means that you get hold of foreign currancy....but cant really use it, unless you spend it in that persons currency. Now, spending is of two kinds. One is usual, that is consumption spending. This is not valued too much by economists (can't imagine why). The other is investment spending, when you invest in another country.
But what happens if you do not really want to do either? Let us take China as the example. They get a lot of American dollars from the US for their goods. Do they buy American cars in return? Not a chance! They would much rather buy better quality Japanese stuff. How about investing in American companies then? I can almost hear a hypothetical Chinese investor snickering away here! Why invest in Fords and Enrons, when you have a Chinese stock market that is barreling its way upward like a bull that just saw true love?
So the Chinese government has to hold on to American dollars, because nobody wants to really spend it. What does that do to the value of the Chinese currency though. Now you have a situation where people are paying good American Dollars for Chinese goods, and the dollars are not really getting back to America. I am not quite certain how the next logical step works, but one of the things that happens is that the Chinese Currency now starts to become more valuable. After all, you might buy your chinese toys in walmart in american dollars, but the chap who owns it now needs remnebi, which nobody can give him, because nobody is willing to buy American dollars and sell remnebi. Thus the Remnebi becomes a stronger currency. At least that is the theory.
However, because the Chinese Government does not want to make their currency stronger, they decided to keep it at a fixed rate....and what does that mean. It means that the laws of demand and supply are being distorted....and there is always a cost to it. In order to keep the Remnebi weak, the Chinese government now has to keep buying dollars and selling remnebi, even though the value of the dollar is not so good anymore.
So there you have it: Why China has foreign currency reserves of $1 trillion dollars.