China finance chiefs to join G7 meeting
(Agencies)
Updated: 2004-09-23 11:22

Group of Seven finance ministers and central bankers will be joined by representatives from China for the first time at the G7 October 1 meeting in Washington, a US official said.

Group of Seven finance ministers and central bankers will be joined by representatives from China for the first time at the October 1 meeting, US Treasury undersecretary John Taylor said. [AFP/file]

John Taylor, US Treasury under secretary for international affairs, called the Chinese participation "historic."

He said China's participation in those meetings is a "natural occurrence," as China is becoming an increasingly important component of the global economy, which he characterized as "in a remarkably good situation right now."

Officials from the United States and other major industrialized countries have recently expressed a desire to include China at the G7 gatherings.

The regularly scheduled G7 meetings of finance ministers and central bankers provide a forum for discussing policy cooperation and also play a crucial role in shaping foreign exchange levels.

The Group of Seven nations are Britain, Canada, France, Germany, Italy, Japan and the United States. Finance chiefs typically meet at least twice a year, and will gather in Washington ahead of the annual meetings of the International Monetary Fund and World Bank.

Russia, which has been invited to G7 discussions since the country's 1998 debt crisis, will not attend the G7 dinner with Chinese officials in October, Taylor noted.

Some analysts argue that the G7 is becoming ineffective in coordinating global economic policies without the world's emerging manufacturing center.

Additionally, some hope that by allowing China into G7 consultations, the Chinese economy will become more integrated into the international financial system by shifting the yuan to a floating exchange regime and speeding up deregulation in the country.

Taylor said that there is movement towards flexible exchange rates on the part of China.

"They are moving, and they have indicated that they intend to move toward flexible exchange rate," Taylor said.

The decision to allow China into the consultations comes at a politically sensitive time, weeks ahead of the presidential election in the United States.

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