The reform of the supply front has now become China's mainstream thinking in economic policy.

We are of the view that there is an important precondition to this – market oriented reform.

Zhong Wei, a contributing economist at ANBOUND, says that a truly efficient policy on supply front should have the following features: -

(i)Promote appropriate contracting in the state-owned enterprises;

(ii)Reduce the policy aiming at promoting steady economic growth when appropriate;

(iii)Do not overly rely on the easing measures, be it fiscal or monetary policy ; and

(iv)Strengthen the protection on intellectual property rights.

In addition to the above, the key aspects of the current macro policy should be adjusted.