Dani Rodrik says:
... China’s currency policies not only undercut the competitiveness of African and other poor regions’ industries; they also undermine those regions’ fundamental growth engines. What poor nations get out of Chinese mercantilism is, at best, temporary growth of the wrong kind.
So Chinese mercantilism is, on balance, bad for poor countries. But that doesn't mean he thinks mercantilism itself is bad:
Lest we blame China too much, though, we should remember that there is little that prevents developing countries from replicating the essentials of the Chinese model. They, too, could have used their exchange rates more actively in order to stimulate industrialization and growth. True, all countries in the world cannot simultaneously undervalue their currencies. But poor nations could have shifted the “burden” onto rich countries, where, economic logic suggests, it ought to be placed.
Instead, too many developing countries have allowed their currencies to become overvalued, relying on booming commodity demand or financial inflows. And they have made little systematic use of explicit industrial policies that could act as a substitute for undervaluation.
In essence, other poor countries could be doing the same thing.
Here's one thing I've never understood about the view that mercantilism should be used for economic growth. He acknowledges the important caveat that "all countries in the world cannot simultaneously undervalue their currencies." But how will it be decided which countries get to take these actions? Do they have to take turns? I think he is implying that all developing countries should be doing this, while none of the rich countries should. But if all developing countries do it, how much of a benefit will there be?
