G- 7 nations resume pressure on China

LONDON— Finance ministers and central bankers from the world’s richest nations resumed their two- year push for China to make its currency more flexible, arguing that steps taken so far fall short of what the world economy needs.

“China’s new exchange rate system has operated with too much rigidity,” U.S. Treasury Secretary John Snow told reporters in London after a weekend meeting of officials from the Group of Seven industrial nations. “ This poses risks to China’s economy and the global economy.” The yuan has appreciated just 0.4 per cent since China’s July 21 decision to replace a decadelong peg to the U. S. dollar with a basket of currencies and allow its exchange rate to rise 2.1 per cent. The country’s major trading partners say that’s not enough to help cut a record U. S. trade deficit and boost economic growth in Europe and Japan.

“ We believe China needs some time to get accustomed to their new currency regime, but a considerable time has already passed,” said Japanese Finance Minister Sadakazu Tanigaki in London. “I expect China to make its currency a little bit more flexible.” Lawmakers and manufacturers outside of China say an undervalued yuan hands Chinese exporters an advantage, con- tributing to a record trade deficit in the U. S., slow expansions in Japan and Europe, and job losses in all three.

Chinese Finance Minister Jin Renqing declined to comment on currencies after meeting his G- 7 counterparts.

“There is obviously concern among the G- 7 about whether the Hong Kong talks can yield sufficient progress in terms of the WTO,” Canadian Finance Minister Ralph Goodale said. “It’s important for the world economy.” The World Trade Organization’s 149 governments gather in Hong Kong on Dec. 13- 18 in the Doha round of trade talks.