BEIJING, April 25 -- As China faces stepped-up pressure from the United States to make quick changes to its currency regime, the central bank governor is continuing to insist that domestic priorities will determine the pace of its reforms.

    ¡°We are making some preparations,¡± Zhou Xiaochuan said Saturday, pointing specifically to ongoing reforms to the domestic banking system. But he said: ¡°It¡¯s a gradual process .... We have our own sequencing of reforms according to the Chinese situation.¡±

    Zhou has frequently argued that China's financial system, which is still making the transition to a market economy, has to be comprehensively reformed before it can be subjected to the pressures that a freely-floating exchange rate would bring.

    ¡°China's reforms must first consider domestic pressures, and then international ones,¡± Zhou told a forum on China's southern island of Hainan. He noted that the last major reforms to China's currency regime, in 1993 and 1994, were also driven by domestic considerations rather than foreign pressure. Since then, the currency, known as the yuan or renminbi, has been kept in a narrow range around 8.277 yuan to the U.S. dollar.

    Nonetheless, Zhou acknowledged that the intense international interest in the renminbi regime has helped concentrate the minds of Chinese policymakers, and could end up helping to speed up the pace of exchange rate reform.

    ¡°There is definitely pressure, but that is beneficial to our reforms and our work,¡± said Zhou. ¡°Our government has repeatedly mentioned that we are going to have exchange rate regime reform,¡± Zhou said.

    (Source: Shenzhen Daily/Agencies)