1) Because of lack of social welfare and retirement benefits, PRC savers save a huge amount of money

2) This money finds itself in the commercial banks earning basically no interest

3) Because they are earning zero interest, the banks can afford to buy sterilization bonds from the People's Bank of China

4) These sterilization bonds allow the PBC to buy huge amounts of USD dollars depressing the CNY/USD exchange rate

5) The massive reserves of USD that the PBC amasses has to be recycled to something, so they are used to buy US government treasuries and mortgage backed securities

6) These purchases depress the interest rate in the US.

7) This leads to a housing bubble.

Now like all Rube Goldberg devices this is using a very complex scheme to solve a very simple situation. PRC saving 50%, US has negative savings. PRC domestic markets can't absorb this savings. Capital wants to flow from PRC to US. Capital controls makes the route very complex.