China dictates the pace

The G8 powers predicted yet another year of healthy economic growth on Saturday at talks which exposed the limits of their clout in a world where China and others not in the club increasingly dictate the pace.

No-shows from the finance ministers of key members the United States and France compounded the limitations of talks to prepare a June summit of the G8 club of industrialized nations.

China's increasing presence as a lender in the region also troubled the G8 ministers, who are worried that Beijing is too willing to lend money to African countries where they have just written off billions of dollars of unpaid debts.

China's growing clout, and its absence from the G8, were also felt on Friday when the country's central bank announced plans to raise interest rates further in a bid to tame red-hot growth.

Several G8 ministers welcomed Beijing's announcement that it was also slightly relaxing the band of fluctuation within which it allows the yuan's exchange rate to ebb and flow versus other currencies.

But they said that they still wanted Beijing to go further in addressing their concerns that it keeps its currency artificially low.

U.S. Treasury Secretary Henry Paulson stayed in Washington to prepare bilateral talks with China and the new French government sent no minister either.