The underlying cause of supply-side structural problems is system and mechanism problems. Therefore, to promote supply-side structural reforms, we should not only fully implement the key tasks of “cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness”, but also pay attention to improving the system and mechanism.Completing the tasks of cutting overcapacity, reducing excess inventory, deleveraging should be combined with the establishment of a long-term mechanism that promotes the continuous improvement of effective supply capabilities. It is necessary to pay attention to three aspects: technological innovation, structural adjustment and optimization, and refined management. Only by perfecting the three aspects of the system and mechanism can we effectively solve the problems of the grade, quality, and safety of supply.The supply side’s driving force for economic growth is mainly the increase in total factor productivity. At this stage, the key to improving total factor productivity is to make up for two shortcomings: one is to deepen the reform of the price formation mechanism of production factors, and the other is to promote the reform of the talent development system and mechanism.Supply-side economics focuses on incentive issues, and supply-side structural reforms should stimulate the vitality of enterprises through the establishment of incentive mechanisms.
