According to the Purchasing Power Parity (PPP) theory, when the inflation rate in one country is higher than another, the currency of the country with the higher inflation rate is expected to depreciate relative to the other country's currency. This is because a higher inflation rate reduces the purchasing power of a country's currency. In this scenario, since the inflation rate in China is higher than in the US, the Chinese yuan is expected to decline relative to the US dollar. This depreciation of the yuan is necessary to maintain the equality of the price of a basket of goods in both countries, as suggested by the PPP theory. Therefore, the Chinese currency (yuan) will decline relative to the US dollar.

Choice A is incorrect. According to the PPP theory, if inflation in China is higher than in the United States, it means that goods and services are becoming more expensive in China relative to the US. This would lead to a depreciation of the Chinese yuan against the US dollar, not a weakening of the US currency.

Choice C is incorrect. The PPP theory suggests that changes in price levels (inflation) will affect exchange rates. Therefore, if there's a difference in inflation rates between two countries, it's unlikely that their exchange rate will remain unchanged.

Choice D is incorrect. As explained above, only one of these statements can be true according to PPP theory and given conditions; hence all of them cannot be correct simultaneously.