Chinese policymakers are laying the foundation for a transformation of the country by 2020 from its primary role as a manufacturer to that of a leading innovator.

Over the past three decades, China has emerged as a major manufacturing base for the world, but the country's competitiveness in advanced manufacturing remains relatively weak, partly because of domestic companies' low investment in research and development.

Only 14 percent of Chinese enterprises with primary operating revenue of more than 20 million yuan ($3.2 million) annually have any R&D activity. Spending on R&D accounts for only about 0.8 percent of their total revenue, while their counterparts in developed countries, such as the United States, spend around 3 percent of sales revenue on R&D.