standing pledge to half the deficit while applauding the Federal Reserve for gradually raising interest rates. China's policy of keeping its exports cheap via fixing its yuan to the dollar will generate more vigorous debate. China has said it will eventually allow a more flexible exchange rate but shows no signs of doing so soon. Its absence from the G7 table for the first time in three gatherings, dampens hopes of greater engagement with Beijing. Snow said Washington feels China has had ample time to bolster its banking sector to withstand a floating currency. "They're there now," he said. "They've made enormous strides in fixing the financial infrastructure. ... It's time for the Chinese to move to flexible currency." He echoed that message in bilateral meetings with France and Japan, a senior Treasury official said. Japan's Finance Minister, Sadakazu Tanigaki, sounded a slightly more cautious note as Tokyo does not want any precipitous action that could destabilize its Asian neighbor. "It is not about simply pressuring China," Tanigaki said, saying any discussion on the yuan should be broader-based. --More 1810 Local Time 1510 GMT
