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Rich nations tackle free trade, say goodbye to Greenspan
G7 to urge China to go further with yuan revaluation

          LONDON, Dec 3 (Agencies): The Group of Seven economic powers would appeal later Saturday for China to go further with its yuan revaluation policy, a European source told the news agency.
The G7 finance ministers and central bankers would make the appeal in the communique issued at the end of their weekend meeting here, the source added.
Chinese Finance Minister Jin Renqing had said Friday that his government believed it was important to carry on with a revaluation of the yuan, but he added that the process would be "gradual".
French sources also said Friday that Renqing had told his French counterpart, Thierry Breton, that "it is very important to continue" with the revaluation.
Back in July, China's central bank scrapped an arrangement under which the yuan was fixed in a narrow range around 8.28 to the dollar.
Instead, a managed floating exchange rate system based on a basket of currencies was introduced, and the yuan was revalued by about 2.1 per cent against the dollar.
At its previous meeting in September, the G7 welcomed the Chinese move.
The United States and the European Union have long sought to pressure Beijing to adopt a more flexible exchange rate policy. They argue that the yuan is undervalued and currently gives Chinese exporters an unfair advantage.
Meanwhile, Britain will try today to resolve the impasse in world trade talks as finance ministers meet to discuss economic problems and say goodbye to Alan Greenspan, the US central bank chief who retires next month.
London and Washington both hope the Group of Seven club meeting will inject fresh life into faltering talks on trade liberalisation in the run-up to a Hong Kong meeting of 148 countries in less than two weeks' time.
Britain's Gordon Brown, who is chairing the London meeting, has put much of the blame on other European nations and called for an end to subsidies for farmers in rich countries, which the OECD says total about $280 billion a year.
"There is a chance for progress if countries worried about services and market access can make some concessions and America and Europe can look again at agricultural protectionism," said Brown before the meeting got underway Friday.
The United States has signalled it is ready to deal. "We have to focus on a spirit of reciprocity," said US Treasury Secretary John Snow after meeting with Brown Friday.
But G7 officials told Reuters breaking the deadlock still seemed unlikely.
France in particular is already very unhappy about concessions being made on the European Union's behalf in the run-up to the Hong Kong meeting, where much of the focus is on giving developing countries greater access to world markets.
The G7 will meet with Brazil, India, China, South Africa and Russia at the start of their Saturday meeting.
Britain said Friday it might consider an extraordinary leaders' summit on the issue. US President George W Bush's office also said such an idea could be considered.
The G7 spent Friday's dinner discussing the risks facing the world economy such as huge deficits in the United States, weak growth in Europe where the European Central Bank has just raised interest rates and China keeping its currency too low.
Washington wants Beijing to let its yuan rise against the dollar so as to ease pressure on American exporters but Snow would not comment on a report that said China would revalue by 7.2 per cent in the New Year.
But the G7 are unlikely to change significantly their language on foreign exchange rates when they issue their final communique at around 1300 GMT.
Global imbalances have also not gone away and the G7 is likely to repeat their familiar message that each continent has to play its part in reducing them.
At the dinner, Brown also paid tribute to Greenspan, who is stepping down next month after 18 years at the helm of the US Federal Reserve, noting he had attended 55 G7 meetings.
Bank of England Governor Mervyn King presented him a cartoon depicting Greenspan as a goalkeeper saving the world from one economic crisis after another.
"It's another great save but the shots keep on coming," it said.


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