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INNOVATION-DRIVEN DEVELOPMENT

The word "innovation" was mentioned 61 times in the government work report, up from 38 times in last year's version. "Innovation is the primary driving force for development and must occupy a central place in China's development strategy," Li said.

The government will build first-class national science centers and technological innovation hubs, help develop internationally competitive enterprises and accelerate China's transformation into a manufacturer of advanced and quality products, said the report.

By 2020, China's R&D investment will account for 2.5 percent of the GDP, and the contribution of scientific and technological advances toward economic growth will rise to 60 percent.

Confronted with looming downward pressure, China is counting on innovation to assist a shift in economic engines.

"Innovation is the source of corporate profitability," said Yuan Liqun, vice president of home appliance producer Midea Group and deputy to the National People's Congress.

The company boasts industry-leading profitability thanks to its encouragement of creativity in employees, including the 100 million yuan (around 15 million US dollars) it earmarks each year to cover incentives for innovative employees and expenditures for their projects.

Manufacturers must make product innovations meet the needs of consumers and survive competition, Yuan said.

Riding on the wave of innovation, growth companies are on the rise. Chinese homegrown smartphone maker Xiaomi has become rather popular on the market. Mobile apps developed by young innovators offering services ranging from car cleaning to manicures are mushrooming on the Internet.

Emerging industries, such as robotics, intelligent equipment, drones and high-speed railways, are becoming China's new economic engines, analysts said.

The government expects the output of emerging sectors to account for 15 percent of GDP by 2020, up from the current 8 percent.