if yuan goes oil denominated and appreciates in value, China's manufacturing advantage from low labor prices evaporates and china knows this. things are already bad in china due to low demand (workers burning factories since they are not getting paid -- look up "brother 800")

Currency appreciates due to printing / supply. Hence I specifically highlighted petro-yuan =/= reserve currency. PRC not going to be brrrrting yuan to replace USD liquidity. PRC simply going to extend yuan swap lines to trusted petro-yuan users, it's not going to fuck with reserve triffin dilemma.

Thing are fine in PRC, exports higher than ever, some sectors getting shafted vs others, but strategic ones, i.e. not low end textile like brother 800 but intermediary goods doing better than ever. BTW side effect of high oil prices is PRC coal to petchem stack for industry just give 2/3 of PRC industry 50% input discount vs everyone else. Now global demand going to fall if high energy price persist, but PRC poised to capture more share simply being even more competitive producer, if not only producer with regular/prioirty access to hormuz energy.