China's broad money supply (M2), which covers cash in circulation and all deposits, is expected to grow 17 percent over last year in 2010, the People's Bank of China (PBOC), the central bank, announced Friday.

China's M2 had increased 21 percent year on year to 66.34 trillion yuan (9.73 trillion U.S. dollars) by the end of May, according to PBOC data.

China would maintain its moderately relaxed monetary policy in 2010, according to the PBOC annual report released Friday.

The central bank said in the report it would work to control the pace of credit growth, maintain the balance of credit, and avoid apparent fluctuations.

The central bank also said a differentiated credit policy should be carried out to optimize the nation' s credit structure.

Specifically, more credit support should be made available for agriculture and small and medium-sized companies, which traditionally face difficulties in obtaining financing.

Favorable credit policies should also be implemented to support underdeveloped sectors, employment, strategically important industries such as new energies, new materials, and energy savings, while strict credit controls should be imposed upon energy-consuming and polluting industries and those with overcapacities, according to the report.