China is a developing country and has adopted a responsible attitude toward the Asian financial crisis and has committed itself to not devaluing its currency, Xinhua quoted Dai as saying.

Beijing has said devaluing the yuan was not in the interests of its economy because doing so would dent foreign investors' confidence in China and make imports costlier.

A devaluation of the local currency would also exert pressure on the Hong Kong dollar peg to the US dollar, and possibly trigger another round of damaging depreciations which have already plunged several Asian economies into recession and sent shock waves through financial markets around the world.

A senior World Bank economist said on Thursday that pressure on the yuan had eased and it would take asharp downturn in the world economy to force such a step.

"The pressures on... the yuan have abated somewhat," Richard New farmer, the bank's lead specialist on East Asia, told a seminar in Bangkok.

Dai also told Santer that China had taken steps to maintain domestic economic growth by increasing money supply, strengthening foreign exchange controls, and balancing international payments.

The official People's Daily on Friday quoted Dai as telling Santer that the view that China would be the next to be hit by the crisis "obviously has no basis at all."

The newspaper gave no further details.

China's policy of opening its financial sector to Europe would not change, Xinhua quoted Dai as telling Santer on Thursday.

Santer arrived on Thursday for a six-day visit, the first by an EU president in 12 years.

Dai said he hoped the EU would continue to "encourage" China's entry into the World Trade Organisation.

China had been paying close attention to the euro, he said, adding that China believed thesmooth development of the euro would play a positive role in stimulating the European economy and stabilising the international currency system.

Santer praised China for its actions during the Asian financial crisis and said the EU needed to learn more about China's stance on the crisis.

He said that the Euro's initiation would be an important factor for stabilising the international economy and finance, and would help European economies.

Santer said the EU supports China's efforts and hopes that China will join the World Trade Organisation before the next round of multi-lateral negotiations.