China's prudent monetary policy will remain neutral this year, with easing or tightening only as appropriate, according to Premier Li Keqiang's Report on the Work of the Government on Monday.

The government will make sure that the valve of aggregate money supply is well controlled and maintain a moderate growth in M2 monetary supply, credit and aggregate financing, said the report.

Efforts will also be made to ensure a reasonable and stable level of liquidity, and increase the proportion of direct finance, particularly equity finance.

"We will improve the transmission mechanism of monetary policy, make better use of differentiated reserve ratio and credit policies, and encourage more funds to flow toward small and micro businesses, agriculture, rural areas, and rural residents, and poor areas, and to better serve the real economy," the report said.