Why is devaluing your currency good for exports? I have the typical answer:

"A cheaper currency means exports will go up because it's cheaper to buy from us!"

Yeah, sure, but that's obviously full of holes.

Let's have a simple situation:


We have China (yuan) and America (\$).
America needs 100 "item" from China every year.
One "item" costs 1 yuan.


Now, let's say currently (situation A):


The rate is 1\$:1yuan
That means America pays \$100 every year.


In situation B, we devalue the Yuan:


The rate is 1\$:2yuan
That means America now does one of the following:


Only pays 50\$ and still gets the same 100 items.


China basically just lost 50\$ a year. China loses.

Still pays 100$ but now gets 200 items instead:


China gets the same 100\$ but is now giving out 200 items instead. China loses.




So, how exactly would China ever benefit from devaluing its currency? It doesn't make any sense to me, you're literally just giving more exports, you are not getting anything more in return.

The only reason I could think of, is that they actually do think that, in order to stay competitive, they need to sell 2 items for 1$ instead of only 1 i.e. they do think it should be that cheap and they don't want the floating currency price to interfere with what they think should be the correct price for their products.
The problem lies with your assumptions. Practical world trade doesn't usually work that way. No one ever devalues their currency by half. 

This would be a practical assumption:

US buys toys from China - say x units. It also buy toys from Japan - say y units. 

Chinese toys cost xx, and Japanese toys cost yy.

Now, the US would start buying more from China (say x + a), by substituting Japanese toys ( now the US buys y - b) with Chinese toys. (The US would never import more without substituting because it won't import more than what it needs, as pointed out by someone else here)

If production is China had slowed down before devaluation, this would result in more production. More jobs, more income for employees. A devaluation is done to boost exports, resulting in more production, resulting in more employment, resulting in an overall increase in economic activity, whether or not it results in a direct increase in the income received through exports (although it usually does)