China evaluates currency exchange

Story link: China evaluates currency exchange

China released a statement on Sunday in which they expressed intent to change the way they assign value to their currency.

They did not indicate when they plan to take this step, which the U.S. and most other members of the G7, meeting over the weekend, insisted that they must take immediately in the interests of encouraging more balanced economic growth around the world.

U.S. Treasury Secretary John Snow stated after the meeting that China has had more than enough time to prepare their financial system to take this step and adopt more flexible exchange rates.

The only G7 nation not to join in the demand that China change their system immediately was Japan. Japan’s finance minister said that China should be left alone to make the decision as it sees fit.

This reaction from Japan is seen partly as caution after recent demonstrations against Japan that have been held in China, as well as a show of regional loyalty.

Some see China’s reluctance to let its currency float on the international market as a way to hold on to its control of the value of its currency.

The G7 nations are the United States, Japan, Germany, Britain, France, Italy, and Canada.