What is "supply-side reform"

The so-called "supply-side reform" is to start from the supply side and the production side and promote economic development by liberating productive forces and enhancing competitiveness. Specific requirements are to clean up zombie enterprises, eliminate backward production capacity, lock the development direction in emerging fields and innovation fields, and create new economic growth points.

Generally speaking, the supply side corresponds to the demand side, with a troika of consumption, investment and export. At the same time, the supply side is labor, land, capital and innovation.

Demand-side management believes that insufficient demand leads to a decline in output, so stimulating economic growth requires "stimulus policies" (monetary and fiscal policies) to increase total demand and make actual output reach potential output. Supply-side management believes that the market can automatically adjust the actual output and make it return to the potential output.

Therefore, there is no need for so-called "stimulus policies" to regulate aggregate demand. To stimulate economic growth, it is necessary to improve production capacity, that is, to improve the level of potential output, the core of which is to improve total factor productivity. The supply-side structural reform aims at adjusting the economic structure, optimizing the allocation of factors and improving the quality and quantity of economic growth.

Extended data

Significance of supply-side reform

1. Importance: Considering the current situation of China's economic development, the central government has lost no time in putting forward the strategic policy of "supply-side structural reform", focusing on promoting the structural reform of the economy, strengthening the structural reform of the supply side, improving the quality and efficiency of the supply system, making the supply system more adaptable to the changes in the demand structure, making the supply side and the demand side reasonably match, and enhancing the momentum of sustained economic growth.

Second, urgency: "It is very important to observe the problem and see the symptoms, and it is more important to find the root cause. At present, under the background of "three-phase superposition", the outstanding problem affecting economic growth is the total amount, but the structural problem is more prominent. The main contradiction is the mismatch, disharmony and imbalance between supply and demand, and the main aspect of the contradiction is not on the demand side, but on the supply side.

At present, the role of expanding domestic demand, especially investment, is decreasing, while the supply system generally presents a situation of excessive low-end products and insufficient supply of high-end products. At the same time, the supply scale of many consumer goods is excessive and the quality is insufficient. Only by appropriately expanding the total demand, adjusting the demand structure and strengthening the structural reform of the supply side can the balance between supply and demand jump from a low level to a high level. "

3. Outlook: While doing a good job in demand-side management, "as long as we grasp the correct direction, strive to forge ahead, accelerate the cultivation of new kinetic energy, transform and upgrade traditional comparative advantages, and enhance the momentum of sustained growth, we will certainly achieve a good start in economic and social development during the 13 th Five-Year Plan period and promote higher quality, more efficient, fairer and more sustainable development."

Baidu Encyclopedia-Supply Side Reform