China is strengthening the Made in China 2025 strategy with new national-level demonstration areas to spur the development of smart-, green- and service-oriented manufacturing.

The decision was made at a State Council executive meeting presided over by Premier Li Keqiang on Wednesday.

One goal is to foster the development of emerging industries and upgrade traditional sectors by furthering the integration of manufacturing and the internet. Support policies for market-oriented reforms will be rolled out to ensure that businesses of all types can receive the same national treatment.

"We need to select some cities or city clusters in China's eastern, western and central regions for the demonstration areas. The key is to support their piloting in system and policy innovation, and to develop an innovative atmosphere and industrial clusters for smart manufacturing," Li said.

"We must enable the manufacturing sector to become smarter, greener and more service oriented to boost the transition from traditional to new growth engines and to keep the economy climbing upward," he said.

Made in China 2025 was first unveiled by the premier in his Government Work Report in 2015.

Two years later, the country has seen increasingly stronger industrial capabilities, smart manufacturing, innovation, product quality and branding. Average productivity was up by 38 percent for China's first 109 pilot projects in smart manufacturing, while operating costs dropped by 21 percent, according to the Ministry of Industry and Information Technology.

Wednesday's meeting determined that the government will take advantage of a variety of government and industry funds to spur innovation and entrepreneurship, and to guide more social capital to support advanced manufacturing. In the demonstration areas, the government will offer stock incentives in State-owned enterprises.

The government will also further cut red tape and streamline approval procedures, improve the business environment and make bigger efforts to attract foreign investment. The use and protection of intellectual property rights will be strengthened, and government compliance oversight will be reinforced.

"Local authorities are highly motivated after the unveiling of the Made in China 2025 strategy. Many countries are also upgrading their manufacturing sectors right now," Li said.

"The Chinese economy has shown a buoyant momentum, but the weakness lies in the manufacturing sector, which requires rapid expansion. We need to focus our efforts on strengthening the sector, which is the foundation of the real economy," he said.

Li highlighted the importance of opening-up and international cooperation.

The meeting also decided to step up the development of innovation centers for manufacturing and technology and to establish a number of public service platforms for entrepreneurship and innovation.

The demonstration areas also will receive support in talent development, and encourage researchers and Chinese talent overseas to set up businesses in the demonstration areas.

Land supply in the demonstration areas will receive extra support, with pilot measures to transform old business and storage facilities, idle buildings and excessive commercial real estate into incubation centers for entrepreneurship.

The premier said funding support to the demonstration areas should be in line with market principles. The government should explore new paths of development, encourage competition, play an enabling role in building platform and drawing talented people, he added.

Zhu Sendi, a special consultant for the China Machinery Industry Federation, said the demonstration zones should be in either major cities or city clusters with strong manufacturing sectors. He helped draft guideline for the Made in China 2025 initiative.

By setting these zones as examples, the manufacturing sector can further integrate with new technologies, such as cloud-computing, big data and artificial intelligence, to evolve into new models, he said.

Traditional manufacturing can develop into smart, green and services-based manufacturing on the way to advanced manufacturing, the consultant said. That should be the way to elevate China's manufacturing industries and achieve the goal of becoming a competitive manufacturing country by 2025, Zhu added.