A Study on Constructing an Index System of the Supply-side Structural Reform

Developing countries need economic transition to overcome the "turning point" and "trap" of economic growth due to factor endowments and diminishing marginal utility. Economic transition is an ongoing objective of China's reform, and the Ninth Five year Plan has pointed out that "the form of economic growth should change from the extensive to the intensive type". Since 2015, China has shifted from a demand-driven economy to a supply-driven economy, where economic growth is promoted through the reform associated with labor, capital and total factor productivity. Also, the phased task of the supply-side structural reform has been determined as "excess capacity reduction, destocking, deleveraging, cost reduction and improving weak links". This paper constructs an index system of the supply-side structural reform and evaluates the impact of the reform quantitatively.