China’s refusal to dispatch a delegation of top officials to a G-7 meeting due in Washington this weekend has revived speculation about the timing of a projected yuan revaluation. At the moment yuan is pegged to the US currency at the rate of 8.277 yuan to the dollar, with a trading band of a 0.3%, although the actual range is much tighter. The US has for a long time been pressing for the revaluation, implying that China has been depressing its currency value artificially so as to boost exports.

Ahead of the G-7 meeting in Washington, D.C., President Bush decisively called on its Asian partner to revalue its currency. The possibility to influence the Chinese is greatly limited by their refusal to attend the meeting.

"We’re pressing China ... for floating her currency, so we can have free and fair trade with China," Mr. Bush said.

Chinese officials, on the contrary, remained stoic as to the possibility of a revaluation, underscoring that the nation will stick to its own time line. People’s Bank of China Gov. Zhou Xiaochuan said in an interview with China’s official Xinhua news agency that the economy has to get ready for the exchange-rate flexibility.
"China’s overriding consideration in its exchange-rate policy is domestic factors and not the trade conditions of individual countries," Mr. Zhou said.

Economists estimate that China needs to revalue yuan at least 20% so as to avoid the inflow of capital in the nation in anticipation of further appreciation.

Premier Wen Jiabao on March 14 announced that the nation is adjusting the exchange rate system and may soon put in changes ``unexpectedly’’.