China's foreign exchange reserves are the world's second largest after those of Japan.

The bulk is held in US dollars with the Japanese yen and German mark also playing a key role.

``There's intense interest in that here and a commitment to put a serious amount of the reserves in the euro,'' Brittan told Reuters in an interview.Brittan is visiting China with a delegation headed by European Commission president Jacques Santer. The group also includes Yves-Thibault de Silguy, commissioner for financial institutions.

In meetings with the EU delegation, officials from the People's Bank of China, the central bank, did not say what proportion of the euro the nation would hold as reserves, he said.

Economists and market analysts have debated how much the euro will displacethe US dollar as a standard unit of international finance -- and especially as the predominant currency in central banks' reserves.

Since the currencies of the euro's 11 member countries will become fractions of a euro on January 1, the world's central bank reserves will automatically include the euro next year.

But some experts have suggested that the euro will feature in so much trade that central banks will want to boost their euro holdings -- even if they are wary about its initial volatility, as Chinese officials are.

Euro-denominated trade will also pressure Japan to moderate what analysts describe as Tokyo's over-dependence on the dollar in its $212 billion reserves, the world's largest.

And Southeast Asian countries that no longer peg their currencies to the dollar may feel they do not now have to emphasise it so much in their reserves.

Brittan said the delegation had also received reassurances that China would not devalue the yuan in the short term.

``We were given renewed assurancesabout the non-devaluation of the renminbi (yuan),'' he said.

China has repeatedly pledged to keep the local currency stable despite pressure from the Asian financial crisis.

Brittan said the regional turmoil had made China's leaders cautious over the speed of financial reforms and sparked worries about the role of hedge funds in world capital markets.

``I don't think it has turned them off liberalisation, but I think it has made them more anxious about the pace of liberalisation,'' he said.

Despite the financial crisis, China was still committed to joining the World Trade Organisation (WTO) and hoped to conclude negotiations before the end of 1999, Brittan said.

``We have made progress but we have not made sufficient progress to do the deal,'' he said.

The United States and other WTO members say China has not taken sufficient steps to reduce trade barriers and open its markets.

``We understand that there are some things that should not be done at this stage -- that you have to have propersequencing -- and the sequencing involves, for example, not removing capital controls at this stage,'' Brittan said.

China's currency is convertible only on the current account, comprised mainly of trade flows, and not the broader capital account.

Santer will address students as well as foreign business executives in Shanghai on Monday as part of the six- day visit.

In Beijing, EU officials praised China for its contribution to regional financial stability but raised concerns over human rights.