Well, the meeting of the G-7 finance ministers happened. Did the U.S. and the G-7 ratchet up the pressure on China, as was previously suggested?

This appears to depend on who you ask. In the Washington Post, Paul Blustein says "no":

In its communique, the G-7 pledged "vigorous action" to deal with "global imbalances" -- a reference to the massive U.S. trade deficit and corresponding trade surpluses of other nations, especially the export-driven economies of Asia. But the statement mostly reiterated past calls for countries to take measures that should help shrink the trade gap, including a reduction of the U.S. budget deficit and "structural reforms" in Europe and Japan to help speed growth.

The G-7 conspicuously refrained from commenting directly on one politically charged issue related to the trade deficit -- China's decade-old practice of keeping its currency, the yuan, pegged to the U.S. dollar at a rate of about 8.3 yuan per dollar. That policy has been widely attacked in recent months, especially by members of Congress and U.S. manufacturers, as an artificially low rate that gives Chinese goods an unfair edge in world markets.

Bush administration officials had raised expectations that the G-7 would turn up the heat on China, because they had ratcheted up pressure themselves in recent days by urging that the yuan be allowed to rise now. Previously, they had refrained from putting the Chinese on the spot about timing.

But the G-7 communique included only the language that has been contained in every such statement for the past year. "More flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility," the statement said.

Andrew Balls and Scheherazade Daneshkhu say "yes" in the Financial Times:

The Group of Seven leading industrialised countries this weekend put China on notice that it must shift to a more flexible currency regime, with finance ministers demanding it take action immediately.

The G7's communique repeated its call for "more flexibility in exchange rates" where it was lacking, to help promote more balanced global growth, and added a demand that "vigorous action is needed to address global imbalances".

Officials said there was no discussion of singling out China because in the statement the language was already clearly aimed at Beijing - and because of the difficulty of getting Japan to agree a formal declaration.

But ministers from all the countries apart from Japan backed a US demand that China should act immediately. (emphasis added)

In this case, both the FT and WaPo are correct. It's clear that the latest G-7 statement doesn't differ much from previous ones, and I have no doubt Japan acted as the brake on any change in the language. However, U.S. Treasury Secretary John Snow also delivered a statement after the communique that was reasonably clear in its intent:

I want to comment specifically on China in this context. China's strong economic growth has made a tremendous contribution to the global economy. China has taken numerous steps over the last few years, including preparing for greater flexibility in their exchange rate, introducing foreign exchange market financial products and strengthening banks and bank supervision. With this groundwork in place, China is ready now to adopt a more flexible exchange rate.

Of course, the U.S. can insist that China is ready all it wants -- whether Beijing will hop to is another question. Until and unless Japan changes its tune, it would appear that China doesn't face a huge incentive to change the status quo.

On the other hand, this Bloomberg report by Tim Kelly suggests that Japan recognizes the political lay of the land:

The U.S. government is under pressure at home to get China to fulfill a pledge to loosen its currency's decade-long peg to the dollar, a Japanese Ministry of Finance official said.

The U.S. administration is under more pressure than governments in Europe or Japan over the yuan, according to the official, who spoke on condition he wouldn't be identified. The official was speaking at a briefing in Washington after a meeting of finance ministers from the Group of Seven.

Developing....