Premier Li Keqiang reiterated the policy to raise the extra tax deduction on research and development expenses of manufacturing firms during his inspection tour to Changzhou of East China's Jiangsu province on March 25, the day after a decision was made at the State Council executive meeting to implement the policy.

During the tour, Premier Li first visited Hengli Hydraulic and had a discussion while meeting with local entrepreneurs.

Those in charge of the enterprises said the policy has encouraged them to increase R&D input this year. An entrepreneur told the Premier their business has planned to multiply R&D expenses by three to five times.

The Premier praised the idea, saying it will boost business innovation and advance industrial upgrading.

"By tax incentives and market-oriented measures, we intend to motivate enterprises and the whole society to scale up R&D expenses in a fair and inclusive way," the Premier added.

He also said the government will carry out the policy at full capacity to benefit businesses within the year.