BEIJING, Jan. 27 -- China will call on the world's most developed nations to strive for exchange rate stability to assist the economic growth of developing countries when Finance Minister Jin Renqing attends a G7 meeting in London next month.

    Ministry of Finance International Department head Zhu Guangyao told a Beijing business forum yesterday that Jin had accepted an invitation to attend the meeting of the Group of Seven (G7) finance ministers in the British capital on February 4 and 5, where he will push for measures to prevent major forex fluctuations.

    Speaking at the Beijing launch of the Chinese-language version of the UK-based Economist Group's publication, The World in 2005, Zhu said: "China hopes rich nations will make more of an effort to maintain a stable forex market, as keeping relatively stable exchange rates between major currencies of the US dollar, euro and Japanese yen is of great significance to the world's economy."

    "We need to limit forex fluctuations to create a favourable external environment for the healthy progress of developing countries."

    People's Bank of China Governor Zhou Xiaochuan will also attend the London meeting, where the finance ministers of the United States, Canada, Germany, France, Italy, Britain and Japan will gather.

    Along with China, representatives of other major emerging economies such as India, Russia and Brazil will also take part in talks with G7 finance ministers in London.

    Building a new world economic order will be another important topic for the meeting of finance ministers as the current global economic order, established more than half a century ago, cannot reflect the world's economic reality.

    "The phenomenal changes that have taken place since World War II are not being properly and fairly addressed. Finance ministers need to consider how to establish new economic order which can adequately represent the voices and demands of developing countries."

    Answering reporters' questions after the business forum, Zhu also indicated that China is open to discussion about the renminbi issue during the G7 talks.

    Zhu said the meetings of finance ministers will certainly touch on the Chinese currency's exchange rate, and "we would like to discuss that issue in the context of international co-operation."

    But he stressed that although such issues can be discussed, there cannot be any external pressures.

    "For any country, the exchange rate issue should be decided by the sovereign state," he said.

    Pressure on China to revalue its currency has been building up, but Zhu said an appreciation of the renminbi would involve a major change in China's international monetary policy, pointing out that China needs to maintain currency stability at the moment.

    Zhu said China has taken gradual measures to relax its control of the capital market to further integrate it with the global economy.

    China, for example, has allowed in principle, the renminbi-denominated bond issuances of three foreign institutions in China - the International Finance Corp, the Asian Development Bank and the Japan Bank for International Co-operation.

    The move is seen as a major step towards liberalizing the domestic bond market.

    Internationally, China will continue to issue sovereign bonds in overseas markets supported by international confidence in China's economic growth.

    Also at the business forum, Steven Barnett, resident representative of the International Monetary Fund in China, said the prospects are favourable for China's economy in the medium term and he projected that the nation's economy will grow by around 8.5 per cent this year.

    (Source: China Daily)