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Chapter One
Neosupply Economics: The Principles of Supply-Side Reform

Over the past four decades, China's economy has created a miracle for global economic growth. In recent years, with the decline of dividends from the company system and market-oriented reforms, factors such as labor, land and high saving rates, as well as foreign technology and the aging supply structure, the Chinese Government has made it clear that the principal contradiction in China's economic development is the structural mismatch resulting from the supply side failing to evolve in step with demand. Thus, it proposed a series of policies to accelerate the formation of new supply and driving forces. The government also encouraged the development of new technology and industries, as well as new growth and business models. Undoubtedly, China is not content with its economic growth achievements over the past four decades. Instead, it is promoting economic structural transformation and exploring new growth models by carrying out supply-side reform. What are the economic principles behind it? Are there lessons that China can share with the rest of the world?