In order for a muscle to contract, a neurotransmitter must cross a synapse between a motor neuron and a muscle fiber. One of the strongest and most common neurotransmitters that has this function is acetylcholine (ACh). At the neuromuscular junction, ACh binds to receptor proteins in the muscle fiber, which in turn open up ligate-bound Na+ and K+ channels into the cell. This produces something called an action potential, which is essentially just a neural impulse. Action potentials usually travel from neuron to neuron, sending messages across the brain and body. However, when one reaches a muscle cell, it stimulates contraction.
Therefore, any chemical that inhibits the production or activity of ACh would inhibit the ability of muscle fibers to contract—and hence would be a muscle relaxant. Chemical C, which stimulates the production of acetylcholinesterase (AChE), IS a good muscle relaxant because AChE does just that. AChE is an enzyme that cleaves active ACh into two inactive fragments: choline and acetate. These compounds are inactive in the synaptic cleft and will not bind to ACh receptors on the post-synaptic muscle tissue. Therefore, this muscle tissue will receive no signal from its corresponding motor neuron and will not initiate a contraction as a result.
As an interesting aside, nerve gas and agricultural insecticides are very potent inhibitors of AChE function. If consumed, they prevent AChE from breaking down ACh, which will uncontrollably signal to muscles to never stop contracting. This can lead to spastic paralysis and death.