Supply side reform helps to solve structural problems in the economic growth cycle. In theory, China Digital Devices Manufacturers reveal the long-term economic growth of the production function Y=AF (k, l), the main factor affecting the GDP is technical input a, capital investment and labour input l k, the function f can be regarded as modes of production organization. These variables have on the supply side. From the perspective of historical experience, the famous "new deal Ronald Reagan" and "Thatcherism" is a great practice of supply-side economics. The Reagan Administration shortly before he took office, United States during 1978-1982 average annual economic growth of only 0.9%. Arthur Laffer, the supply-side economists are enabled by President Ronald Reagan to serve as economic advisor, through initiatives such as tax cuts and cutting government spending, by 1983-1986, the United States economic growth increased to 4.8%. Iron Lady Thatcher also during 1979-1990, through supply-side advocates a series of initiatives such as the reform of State-owned enterprises, led the United Kingdom entered a steady development of the economy. Supply side reform at home just became a hot topic, but the reforms have actually started at the beginning of this administration took office. This administration established a commitment to decentralization, to more than 1700 central departments approval to cut one-third. Continue to promote tax cuts after reducing costs, encourage innovation, are all way of supply-side thinking.

Supply side reform aimed at issues of the mismatch between supply and demand. Faced with economic problems, supply side reform future tasks are complex, but the recent central economic work Conference, the five tasks, supply side and everything related to structural reforms. The five major tasks is to capacity, inventory, leverage, cost reduction, fill the short Board.

Capacity main can reduce excess capacity. This work is addressed the negative effects of demand-side policy, and second, on the supply side of free markets and funds. Led a group of zombie companies out of the market, to make market space with sustainable development ability of enterprise. Asset and debt restructuring, promoting a number of bankruptcies with low capital efficiency, you can activate the part of the banks ' bad loans, so that money into more efficient business.

To digest the estate inventory in stock. This work can improve the structure of land supply, inventory of real estate stock funds. In the short run, Digest real estate inventories could slow down new investment, but also reduce the industry to compete with other land, to enhance the manufacturing capability of land supply. More inventory of real estate on the mountain of Bank mortgage funds and improve fund use efficiency.

Deleveraging to guard against financial risks, provide a better financial environment. In addition to regulate the capital market, but also accelerated the pace of internationalisation of forcing reforms in the financial sector. Yuan in the IMF's special drawing rights (SDR) after the basket, will greatly accelerate the pace of internationalization of RMB, also you will speed up the pace of internationalization of China's enterprises.

Reducing costs is to reduce the cost. Relying on tax cuts and reduced-fee way to reduce costs is the main policies of supply-side ideas. Professor Arthur Laffer's supply-side representative figures "Laffer curve" indicates that lower tax rates are usually capable of broadening the tax base, reduce tax evasion, so in a certain interval, taxes can increase government revenue. And lower taxes to encourage enterprises to recruit more talents, increase research and development investment, improve labor supply level.

Make the main task is to reduce regional and rural areas Wholesalers suppliers. Poverty alleviation through precise, developing vocational education and improve the quality of rural labor force, in promoting coordinated regional development and for improving the labour market structure and level of benefit.

In short, these five tasks for improving the market, land, human resources, capital, technology, business environment and factor supply conditions are positive.