The annual Central Economic Work Conference is keenly watched by investors for clues on policy priorities and main economic targets for the year ahead.
"The prudent monetary policy needs to be more flexible so as to create appropriate monetary conditions for structural reforms," Xinhua said, citing a statement after the conference.
China's proactive fiscal policy needs to be more forceful, Xinhua said, adding that the top-level meeting called for an expansion of China's fiscal deficit ratio gradually.
The Xinhua report came after a source with direct knowledge of the meeting, which began on Friday, said China would keep its economic policies accommodative in 2016 to help support the slowing economy.
The government will take steps to expand aggregate demand while pushing forward "supply-side reform" next year, said the source who briefed a small group of reporters about the meeting.
"We need the economy to grow at a certain pace in order for structural reform to be carried out," said the source, who requested anonymity.
The People's Bank of China has maintained a prudent monetary policy since 2011, raising or cutting interest rates in line with shifts in the economy. The pro-active fiscal policy has been in place since the depths of the global crisis.
The PBOC has cut interest rates six times since November last year and reduced the amount of cash that banks must set aside as reserves, while the government has stepped up spending on infrastructure projects and eased restrictions on home buying to boost the sluggish property market.
The source said both China's and the world's economic recoveries are expected to be "L-shaped", implying a sustained period of modest growth that follows a sharp slowdown.
"Because we realize that will be an 'L-shape', you cannot only use demand-side policy to drive the economy," the source said.
Chinese leaders have pledged to keep the country's economic growth in a "reasonable range" in 2016 by expanding domestic demand and making supply-side improvements.
The government will expand its budget deficit next year and cut tax to help reduce burdens on companies, said the source.
Steps will be taken to reduce overcapacity and property inventories, the source added.
The government has been struggling to reach its economic growth target of about 7 percent this year, despite a raft of policy easing steps in recent months.
President Xi Jinping has said China must keep annual average growth of no less than 6.5 percent over the next five years to hit a goal of doubling gross domestic product and per capita income by 2020 from 2010.
Premier Li Keqiang recently pledged to step up "supply-side" reforms to generate new growth engines in the economy while tackling factory overcapacity and so-called zombie firms.
By:
Reporting: Xiaoyi Shao, Judy Hua, Sue-Lin Wong and Kevin Yao.
Editing: Sam Holmes, Robert Birsel.
Review: Emerging Market Formulations & Research Unit, Flagship Records.
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