China Targets 14% of M2 Growth for 2012

China targets a 14-percent growth in broad money supply, or M2, for 2012 as the government vowed to continue a prudent monetary policy, according to a government work report to be delivered by Premier Wen Jiabao Monday morning.

The 14-percent M2 growth target in 2012, higher than an actual increase of 13.6 percent year-on-year in broad money supply last year, is the lowest level since 2001, according to data from the People's Bank of China, the central bank.

"We will employ a full range of monetary policy tools, appropriately adjust the supply and demand of money and credit, and maintain proper growth of financing from nongovernmental sources," said the report distributed to the media before the opening of the annual session of the National People's Congress (NPC), China's top legislature.

The government pledged to improve the credit structure, support key state projects that are under construction or expansion and low-income housing projects, and increase credit support to enterprises, especially small and micro businesses, whose operations are in accordance with industrial policies and whose products have market demand.

According to the report, the government will effectively reduce the financing costs of the real economy, and continue to strictly restrict loans to industries that are energy intensive, have high emissions or possess excess production capacity.

The government will set up a sound mechanism for preventing systemic financial risks and for coordinating financial oversight and supervision to strengthen the ability to withstand risks, standardize all types of lending activities, and guide the sound development of private financing.