BEIJING -- Research and development (R&D) spending in China reached one trillion yuan ($164.1 billion) in 2012, about 1.98 percent of its gross domestic product (GDP), Minister of Finance Lou Jiwei said Tuesday.

R&D expenditure as a percentage of GDP is viewed as an important indicator to evaluate a country's investment in innovation. R&D spending as a percentage of GDP in China was 1.54 percent in 2008.

The growth rate of fiscal expenditure in R&D surpassed the growth rate of fiscal revenue, Lou said when delivering a report to the ongoing bi-monthly session of the Standing Committee of the National People's Congress, the country's top legislature.

Fiscal expenditure in science and technology development increased to 560 billion yuan in 2012 from 168.9 billion yuan in 2006, an average annual growth rate of 22.73 percent, Lou told senior legislators.

Total expenditure in science and technology in the last seven years has reached 2.42 trillion yuan, accounting for 4.37 percent of the country's fiscal expenditure.

Lou said the increase in spending has helped developments in science and technology, and improved the country's innovation capabilities.

According to the Global Competitiveness Report issued by the World Economic Forum, China's innovation capabilities ranking rose to 26th in 2012 from 48th in 2006.

Improved capabilities have played an important role in developing advanced and strategically important sectors, and in the meantime, science and technology have helped provide better services for people, Lou added.