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Demand grows for supply-side focus

By Zheng Yangpeng ( China Daily ) Updated: 2016-01-20 08:15:06

As the government debates ways of injecting greater momentum into the Chinese economy, the recent deliberations of a committee may point the way forward, as Zheng Yangpeng reports.

"Supply-side reform" has been a buzz-phrase since early November, when President Xi Jinping mentioned it at a top economic meeting. Overnight, nearly everybody in Beijing's policy circles began talking about it, as if the phrase had magical powers.

So what exactly is supply-side reform? Chinese economists first raised the concept when economic growth began to slow after 2012, arguing that policymakers should pivot toward the supply-side model, as the antithesis of the long-favored Keynesian demand-side management. Essentially, supply-side economics is predicated on the belief that lowering corporate taxes will encourage investment in industry and, in turn, spur growth.

Demand grows for supply-side focus

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