China gave notice some weeks ago that it did not intend to send senior officials to the meeting, according to G7 officials.

The US Treasury confirmed Tuesday that senior Chinese officials would not attend.

``Maybe, there's nothing fresh to say this time,'' said Alan Ruskin, director at 4Cast, a currency and fixed-income research firm in New York.

``It's a topic to be revisited, certainly, but maybe not every three months. China is still a huge factor.''

Lower-ranking Chinese officials will still attend the International Monetary Fund and World Bank spring meetings in Washington, held at the same time.

High-ranking officials have attended the past two meetings of the G7 richest industrialized nations in an observer capacity, fueling some speculation in currency markets that Beijing might move soon to revalue its fixed currency.

But while Beijing has loosened some capital controls and is in talks with several foreign banks about opening up currency trading, China's yuan currency remains pegged to the US dollar at about 8.28.

Chinese officials have said they will eventually allow a freely traded yuan, but at a time of its own choosing, most likely when the country's banking sector is strong enough to cope with the shock.

``It's ongoing pressure from the international community,'' said Sophia Drossos, currency strategist at Morgan Stanley in New York. ``It doesn't go away, it's pretty well entrenched.''

But as a US Treasury spokesman said Monday, foreign exchange is not a hot topic right now. Issues including soaring oil prices and threats to global growth are seen likely to top the agenda.

US policy-makers complain that China's fixed currency is undervalued against the dollar, making it easier for Chinese exports to sell in the United States in competition with US manufacturers.

Speculation as to when China will take the first concrete step toward a fully free-floating yuan is rife.

Currency watchers say this will likely be a widening of the yuan's trading band, or re-pegging it to a basket of currencies.

So although China is not even a G7 member, its absence next week after two consecutive appearances will still be food for thought in economic circles.

``Technically, you can read it both ways,'' said Ruskin at 4Cast. ``While it's clearly premature to conclude that China's absence means anything for timing a yuan regime change, we still think at least at the margin that China distancing itself from G7 peers supports a regime change near term,'' JPMorgan currency analysts wrote in a research note. ``China wouldn't want to risk being seen influenced by external forces when it finally pulls the FX trigger,'' they added.

On the other hand, the dollar has been recovering against the euro and yen in recent weeks, relieving pressure on European and Japanese exporters, and taking the pressure off China to do something about the yuan.

``We do not anticipate a change to the language on FX in the G7 communique,'' a Morgan Stanley currency analysis team in New York said.

The last two G7 statements, from Washington last October and London in February, have called for increased exchange rate flexibility in ``major countries or economic areas that lack such flexibility'' - a clear reference to China.

REUTERS