Friday, April 24, 2009

G7 hails China's actions and pledges supoort

The G7 major economies Friday hailed the contribution of “many countries,” including China, in the fight against the global economic crisis and pledged to work toward increasing their clout in international financial institutions.

“Many countries are now playing a major role in the global economy and we welcome their contribution to the collective international effort to promote recovery,” Group of Seven finance officials said in a statement following a meeting in Washington.

“We welcome China’s continued commitment to move to a more flexible exchange rate, which should lead to continued appreciation of the renminbi in effective terms and help promote more balanced growth in China and in the world economy,” the G7 finance ministers and central bank governors said.

The G7 added that they “will work with our international partners to modernize the governance of the international financial institutions in order to enhance their relevance, effectiveness, and legitimacy.”

The People’s Bank of China cut the renminbi’s peg to the dollar in 2005 and since then has allowed it to appreciate steadily, but under close control.

In recent months, the Chinese government appears to have decided the currency had gone up enough against the dollar as the global crisis saps its key export market.

Source: G8 Research Group University of toronto

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