I've blogged about Dani Rodrik and policy space before. He is now making similar points related to the specific case of China, arguing that China's currency undervaluation is a substitute for the protectionist policies it can no longer undertake as a result of joining the WTO:
Let's put aside the question of whether industrial policy is the best path for economic development. Assuming it is, how much does the WTO constrain this? My understanding has always been that the GATT/WTO allows a certain amount of protection, but simply tries to shift as much protection as possible to transparent methods such as tariffs, and away from harder to detect internal measures. So how high are China's tariffs? I'm sure there is a more precise answer than this, but here's what I see in the press release related to China's accession in 2001:
It seems to me that, in its WTO accession terms, China was able to maintain fairly high tariffs on the products it considered important (a high of 65% for agricultural products and 47% for industrial products). Aren't these high enough for it to undertake an effective industrial policy?