SHANGHAI, China (AP) _ China plans to step up promised reforms of its rigidly regulated foreign exchange system while tightening controls on foreign currency transactions, state-run media reported Friday.

The report did not did not indicate any change in the government's policy of keeping China's currency, the yuan, pegged at a rate of about 8.28 yuan per U.S. dollar. U.S. officials contend that the exchange rate keeps the yuan at an artificially low level, giving China's exporters an unfair advantage by making their products cheaper in overseas markets.

But Li Ruogu, deputy vice governor of the People's Bank of China, said reforms would move ahead.

``China will promote improvements in the yuan exchange rate system and meet increasing market needs for products with a high liquidity, investment value and low risk, so as to speed up the process for the conversion of yuan,'' the Xinhua News Agency cited Li as saying.

This week during a state visit to Washington, Premier Wen Jiabao repeated to U.S. President George W. Bush, who has been pushing for a rise in the yuan's value, Beijing's pledge to eventually loosen exchange controls. So far, though, the Chinese side has given no timetable for doing so.

Li said the reforms of the exchange system would be ``step-by-step'' and based on international experience and China's own conditions.

Meanwhile, a senior foreign exchange official vowed to intensify China's efforts to curb illegal foreign currency dealings.

China should steadfastly fight all kinds of illegal foreign currency transactions such as the ``underground money markets'' and cross-border money laundering, Li Dongrong, deputy chief of China's State Administration of Foreign Exchange, wrote Friday in the state-run newspaper Financial News.

A recent analysis by the Bank for International Settlements found that Chinese companies and banks have been repatriating billions of U.S. dollars and other hard currencies, partly because of speculation that the government might allow the value of the yuan to rise.

Li Dongrong accused some unnamed financial institutions of violating policies for foreign currency management and risk management. China plans to set up a system to supervise foreign currency payments by banks and to tighten management of foreign currency businesses conducted by securities and insurance companies, he wrote.