"Although risks remain, such as energy prices, overall the balance of risks to the outlook has improved," said a statement by finance ministers and central bankers of Britain, Canada, France, Germany, Italy, Japan and the United States.

The communique, issued Saturday, made no direct mention of China.

It did, however, repeat a two-month-old comment emphasizing the need for "more flexibility in exchange rates," a clear prod for China to start freeing the yuan from a fixed peg to the dollar.

The yuan-dollar peg is widely blamed for depressing the value of the yuan, giving an unfair advantage to Chinese exporters, and for contributing to mushrooming Chinese foreign exchange reserves and heated growth.

China recorded an economic growth pace of 9.7-percent in the first quarter of this year.

"I am surprised that nothing was said about the risk that China poses to the world economy," Wells Fargo Bank chief economist Sung Won Sohn said.

"There is over-investment and overheating going on in China and that is not only boosting commodity prices, but the bubble could be pricked and that could adversely affect the rest of the world," he said.

"A supportive statement from the G7 would have emphasized the concerns around the world."

Despite the absence of China's reference from the communique, G7 policymakers did express concern about China's growth rate.

They "commented on the concerns about overheating in some sectors," US Treasury Secretary John Snow said.

David Gilmore, foreign exchange analyst with Foreign Exchange Analytics, said the risk was grave.