Supply-side reform, also known as supply-side structural reform, refers to promoting structural adjustment, correcting the distortion of factor allocation, expanding effective supply, improving the adaptability and flexibility of supply structure to demand changes, improving total factor productivity, better meeting the needs of the broad masses of the people, and promoting sustained and healthy economic and social development.

Generally speaking, supply in supply-side reform refers to supply, the supply side is the party providing products, and the consumer is the party in need, which is called "demand side". "Supply-side reform" means starting from the supply side and the production side, and promoting economic development by liberating productive forces and enhancing competitiveness. Specific requirements are to clean up zombie enterprises, eliminate backward production capacity, lock the development direction in emerging fields and innovation fields, and create new economic growth points.

The purpose of supply-side structural reform is to adjust the economic structure, realize the optimal allocation of factors and improve the quality and quantity of economic growth. Demand-side reform mainly includes investment, consumption and export, while supply-side reform includes labor, land, capital, system creation and innovation.

Supply-side management believes that the market can automatically adjust the actual output to return to the potential output, so there is no need for so-called "stimulus policy" to adjust the total demand. To stimulate economic growth, it is necessary to improve production capacity, that is, to improve the level of potential output, the core of which is to improve total factor productivity.