U.S. designates China a currency manipulator, escalating trade war. How do you think China might react?

By continuing to manipulate currency and continue its economic warfare.  That's what China do.

China ignores it, given that the US has been THE currency manipulator and economic warmonger since the First World War. Even more so since Nixon unilaterally smashed the gold standard in 1971, restarting the boom-and-bust cycles that gave us the Great Depression. When America hits its economic thumb with a hammer, the rest of the world screams in pain.

I think they will make some retaliatory move.  China is not going to take this lying down - they can't afford to.

They are manipulating the currency.  

If I were China, I would say, "Manipulate? You want manipulate?  Here's your frickin'  manipulation!"  Then I'd lower the yuan even more.