China to pursue prudent, neutral monetary policy in 2017

A bank staff member checks RMB banknotes at a bank in Lianyungang, east China's Jiangsu Province, Jan. 7, 2016. [Photo: Xinhua/Si Wei]

China will pursue a prudent and neutral monetary policy in 2017, with the M2 money supply to grow by around 12 percent, according to a government work report delivered at the annual parliamentary session on Sunday.

The M2 growth target was one percentage point lower from the 13 percent set for last year. In 2016, the M2 money supply increased by 11.3 percent, according to the report.

The government will apply a full range of monetary policy instruments, maintain basic stability in liquidity, see that market interest rates remain at an appropriate level, and improve the transmission mechanism of monetary policy.

Efforts will be made to encourage a greater flow of financial resources into the real economy, particularly in support of agriculture, rural areas and farmers, and small and micro businesses, it said.