Abstract: China′s economy has experienced rapid growth over the past 30 years,and now it is facing with new development situation: from shortage economy to widespread overcapacity. In response to overcapacity, the most common is a macro policy of demand management. However, it has only short-term effects, even can delay structural adjustment and enhance overcapacity. After the reform and opening up, Chinese economic growth is mainly based on the expansion of the quantity, which accumulates serious structural imbalances. As a result, a single demand management is becoming more and more unsuitable for the situation. Changing macroeconomic management policy and paying more attention to supply management are undoubtedly correct selections of the new situation. As the modern economy runs more and more complicated, any theory or policy will meet challenges in reality. It is an inevitable choice to adapt theories and policies to the situation. What′s more, we should implement a new supply management which not only has its particularity, but also has the special logic. Therefore, the use of supply management must be based on the reality of China and select special policies to improve Chinese supply quality and efficiency.

Key words: excess capacity, supply management, demand management