As an observer invited to join the current Group of Seven (G7) meeting, China is able to have direct dialogues with the elite club.

The Chinese finance minister and central banker and their counterparts from those industrialized countries can help address the major challenges the world's economy is facing.

As oil prices raced to fresh record highs above US$50 a barrel recently, the world's key economic policy-makers who gathered in Washington this weekend are surely not short of topics for discussion.

China was clearly not invited to the G7 talks for its massive appetite for products from all round the world.

The impact of China's soaring demand on the world market is a cause for concern to the world, but no more than it is to the country itself. China is trying hard to shift its focus from rapid growth to sustainable development.

Given the lack of pricing power in proportion to its growing role in the world's economy, China has ample reason to make its presence felt in multilateral talks that may affect the direction of the international market.

In a sense, what the G7 meetings offer to China as well as the big industrial countries is a rare chance for all participants to share their concerns and conceptions about critical global economic issues.

The privileged G7 consists of Britain, Canada, France, Germany, Italy, Japan and the United States, which together account for about 65 per cent of the world economy.

Nevertheless, there is already argument that the G7 is becoming ineffective in co-ordinating global economic policies without China, the world's emerging economic power.

More than 25 years of robust economic growth has transformed China into an increasingly important part of the global economy. In particular, its long-term opening-up policy has enabled many countries to benefit from its growth momentum.

Modern infrastructure, a skilled workforce and huge domestic demand made China the largest recipient of foreign direct investment last year. This year, the country's trade volume is projected to exceed US$1 trillion.

As the Chinese economy gets further integrated into the world's economy, the country has found that challenges are also mounting as its contribution to global growth increases.

The exchange rate of its currency is one of the prickly issues developed countries have raised against China in recent years. The G7 meeting will undoubtedly be no exception.

China resisted devaluation pressure, serving as an anchor of regional economic stability, when the Southeast Asian financial crisis broke out in 1997.

But when the US dollar fell against other currencies in the past few years, unfair blame was laid on China for not appreciating its currency accordingly.

As a developing country that is undergoing drastic economic transformation, the country has a huge stake in maintaining necessary financial stability to allow market-oriented reforms to take root in all sectors of the economy.

The country's policy-makers have keenly realized the need to develop a more flexible exchange rate regime that can respond swiftly to market changes.

China should make its stance clear at the G7 to facilitate better understanding of its exchange rate issue.

But more importantly, if the G7 gatherings are to provide any real answer to global challenges, other participants should also be ready to enter dialogue in a co-operative manner.