These are the reasons I see why China still wants a weak currency and therefore has to hold/accumulate USD.
1. Helps retain existing low-value manufacturing. That translates into jobs for low-skilled workers which China still has many of
2. Gain more high-end manufacturing industries eg. Energy and electric vehicles. These are the industries of the future which will power future economic growth to high-income status
3. The more manufacturing China has, the more the rest of the world is dependent on China. That makes decoupling or derisking so much more difficult. It means imposing sanctions on China isn't an option, particularly since the West only accounts for 15% of global population and 40% of global economic activity
4. If China is sanctioned, it's pretty much guaranteed that a war (of some sort) is happening or will happen. In such a scenario, having overwhelming manufacturing capacity to win any war is more important than losing a few Trillion USD. In the aftermath, we may even see these USD assets being returned as part of any settlement or reparations.
Not devaluing currency really doesn't help China much. Other countries avoid China's strategy because pushing down their currency incurs economic damage when they are reliant on imports. But China has very little need of imports, and most of the import it gets are resources, which are purchased at rates that aren't affected that much by currency fluctuations.
A controlled push downwards makes products more affordable. That's been the government's policy since the Deng era. And it works. Livelihoods become more affordable while international market competitiveness stays high.
Later on, when China acquires more satellite countries, there are good arguments to allow currency to jump back up in order to encourage outbound flows from China to economically colonize these territories.
But ultimately, China is an engineer's and inventor's country, not a investor's and banker's country. Staying at the forefront of education, product development and science, these venues will always be the mainstay of its earnings, not rentier collection from the economically colonized.
So I think China (at least under communist government) will always to some degree suppress currency. Hence why they have made proposals such as adopting a new virtual currency, rather than letting yuan take the place of the dollar.
The ideal scenario for China would be to remove unearned American influence from the global economy, institute a new "neutral" global currency stewarded by Beijing itself, but keep the yuan roughly as it is.
However, enemies also get a vote and while the current global instabilities have caused damage to the dollar, it has also revealed that the above scenario might not be realistic. The other countries don't want a new virtual currency, they want yuan and they want it now. So China would have to respond to this in some way.
