China will implement a prudent monetary policy in 2011 and plan a 16-percent increase in the broad money supply (M2), says a government work report to be delivered by Premier Wen Jiabao at the parliament' s annual session Saturday.

The government will employ the price and quantitative instruments and improve the effect of its monetary policy, reads the report, distributed to the media before the opening of the Fourth Session of the 11th National People' s Congress (NPC).

The government will continue the proactive fiscal policy this year, the report says.

China has targeted a 17-percent rise in the M2 in 2010, which actually increased 19.7 percent over 2009.

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