G7 demands China currency reform

In their weekend meeting, the G7 nations - the United States, Japan, Germany, Britain, France, Italy, and Canada - sent a clear message to China that it has to convert to a more flexible currency system.

The group called for “more flexibility in exchange rates,” which it said was necessary in order to achieve more balanced growth around the world.

The U.S. Treasury Secretary, John Snow, said after the meeting that China has had more than enough time to get its financial system ready to adopt a more flexible exchange rate.

China, meanwhile, released a statement Sunday saying that they “intend” to reform the system by which they value their currency, but did not say when this might happen.

All of the G7 nations with the exception of Japan supported a U.S. demand that China act immediately. Japan’s finance minister said that China should be left to make its own decision on whether or when to make the changes.

Japan’s hesitation to pressure China to reform its system has been explained as regional loyalty combined with concerns over recent anti-Japanese protests in China.

China has been seen as reluctant to let their currency float on international markets because they want to keep control of its value.

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