Research Writing: How to Do a Literature Review

10. Pursuing Both a Moderate Expansion of Demand and
Supply-Side Structural Reforms
“The Outline of the 13th Five-Year Plan of PRC’s National Economic and Social
Development” issued in 2016 points out that “we must aim at improving the quality and efficiency of the supply system.” This can be viewed as the refining statement of the ideas of development. We can combine the following two aspects in
an organic and efficient manner: the reform, development and management of
demand-side “Troika” constituted by investment demand, consumer demand and
net exports, and the reform, development and management of supply-side “new
Troika” constituted by input supply, structure supply and technological innovation. Currently, while we pursue a moderate expansion of total demand, we need
to insist on strong supply-side structural reforms in order to improve the quality
and efficiency of the supply system, and enhance the progress of sustained economic growth and development. This is because the relationship between supply
and demand is intrinsically complex and dialectical. For example, the supply (production) can determine the demand (consumption); one can only consumes goods
and services supplied by the production, but demand (consumption) may also
decide supply (production), because goods and services which do not fit the
demands of the buyers are Ineffective supply and production. In another example,
for the current period or the short term, investments, in the form of money expenditure to buy the factors of production, belong to the demand. But for the next
period or the long term, investments, in other words, the sunk assets determine the
production and technical conditions, belong to the supply. Therefore, the coordination of the supply-side and demand-side reform and development requires dialectical thinking and precise operation.