No, the cost of their products won’t go higher. They have the yuan pegged to the dollar. The dollar goes down, the yuan goes down.
Their biggest hit would be in the cost of dollar-denominated goods that they import, especially oil and diesel fuel.
This is why there is no such thing as “Free trade” with China. As long as they maintain the currency peg, they have the upper hand.
The currency peg costs them money. Just as this move costs them a huge amount of money.
If they were to float their currency, they would actually be better, not worse off. By doing forced devaluation, they are actually hurting their domestic economy.
Basically the currency peg is no different than setting fire to your money and watching it burn.