Transcript China Annual Expenditure-Based GDP Accounting Methods

China Annual Expenditure-Based
GDP Accounting Methods
WU You
2009
Establishment and Development
 In 1989, Expenditure-based GDP estimates were developed
on trial basis
 In Jan 1990, Expenditure-based GDP estimates were added
to annual report
 In Oct 1993, “Program of Explanatory Notes on Gross
Domestic Product Indicators and Estimating Methods” was
issued in all regions
Establishment and Development
 In 1995, National Bureau of Statistics first published
national expenditure-based GDP figures for 1978-1994 and
30 provinces, municipalities and autonomous region’s
figures for 1993 in "China Statistical Yearbook“
 Department of National Accounts of National Bureau of
Statistics has improved and revised the expenditure-based
GDP accounting system for many times since 2000
 At present, the state and regions have formally established
the annual expenditure-based GDP accounting system
Basic Frame
GDP
Final
Consumption
Expenditure
Household
Consumption
Expenditure
Government
Consumption
Expenditure
Gross Capital
Formation
Gross Fixed
Capital
Formation
Changes in
Inventories
Net Export of
Goods and
Services
Export of Goods
and Services
Inport of Goods
and Services
Accounting Contents
1. Household Consumption Expenditure (Rural and Urban Household)




Food
Clothing
Residence
Household Appliances and
Services
 Health Care and Medical
Services
 Transport and
Telecommunications
 Education, Culture and
Recreation and Services
 Financial Service
 Insurance Service
 Owned Housing Service
 Kind of consumption
 Other Goods and Services
Accounting Contents
2. Government Consumption Expenditure
 Current Operating Expenditures
 – Operating revenue
 + Depreciation of Fixed Assets
Accounting Contents
3. Gross Fixed Capital Formation
 Residential Construction
 Non-Residential Construction
 Machinery and Equipment
 Land reclamation expenditures
 Mineral exploration costs
 Software
 Others
Accounting Contents
4. Increase in inventories
 Raw materials
 Fuels
 Finished products
 Unfinished products
 Semi-finished products
 Work-in-progress
Accounting Contents
5. Net Export of Goods and Services
 Goods import and export can be divided into general
trade import and export, processing trade import and
export and others.
 Services import and export can be divided into
transport service, travel service, communication
service, insurance service, computer and information
service and others.
Accounting Methods (current price)
1. Household Consumption Expenditure (Rural and Urban Household)
 Consumer expenditure of Food, Clothing, Residence, Household
Appliances and Services, Health Care and Medical Services,
Transport and Telecommunications, Education, Culture and
Recreation and Services, Others = Per Capita Consumer
expenditure (relevant category in Rural and urban household
surveys) × annual average number of residents
 Annual average number of residents = (the number of residents in
the beginning of the year+ the number of residents in the end of
the year) ÷2
 Source: Annual survey data of rural and urban households
1. Household Consumption Expenditure
 Finance Service Consumer Expenditure =financial intermediation
services calculated indirectly + financial services paid directly of
Rural and urban household consumption.
 Financial intermediation services calculated indirectly of household
consumption expenditure
= (savings deposit of household+ households consumer loans)/ (savings
deposit of financial institutions+ balance of loans from financial
institutions) *Financial intermediation services calculated indirectly
 Financial services paid by urban households directly are calculated
basing on finance source of financial institution related.
1. Household Consumption Expenditure
 Insurance intermediation services calculated indirectly
of urban and rural households consumption
expenditure= (total insurance expenditure/total
insurance income) * Insurance intermediation services
output calculated indirectly.
1. Household Consumption Expenditure
 The imputed consumption expenditure of the urban households
owner-occupied housing services =Repair maintenance cost of
urban households owner-occupied housing+ Administer cost of
urban households owner-occupied housing+ imputed
depreciation of urban households owner-occupied housing
 And, imputed depreciation of urban household owner-occupied
housing rate is: Urban 2%, rural 3%
1. Household Consumption Expenditure
 Consumer expenditure of Food, Clothing, Residence, Household
Appliances and Services, Health Care and Medical Services,
Transport and Telecommunications, Education, Culture and
Recreation and Services, Others----CPI
 Finance and insurance Service Consumer Expenditure----price
index of financial intermediation services and insurance services in
production-based GDP estimates
 The value of imputed consumption expenditure of the urban
household owner-occupied housing services is deflated by volume
extrapolation
2. Government Consumption Expenditure
 Government Consumption Expenditure= Current Operating
Expenditures– Operating revenue+ Depreciation of Fixed Assets
 Current Operating Expenditures= (Expenditures on Wages and Welfare+
Expenditures on Goods and Services+ Expenditures on National Defence)
+ (Subsidy Expenditures on Individual and Families- Pension CostsLiving Allowance- Relief Costs- School Aid Costs- Production Subsidies)
 Depreciation of Fixed Assets= Original value of fixed assets*
Depreciation rate (4%)
 The main data sources of Government consumption expenditure are
current Operating Expenditure in <subsidiary table of expenditure budget
of the national budget units> which is the final accounts of administration
& institution from Ministry of Finance and Defense White Paper.
2. Government Consumption Expenditure
 Current Operating Expenditures: CPI
 Depreciation of Fixed Assets: price index of fixed
assets
3. Gross Fixed Capital Formation
 Gross Fixed Capital Formation = Residential Construction
+Non-Residential Construction+ Machinery and Equipment+
the value of land improved+ the prospecting of minerals+
computer software+ others
 Source: statistical annual report of fixed assets investment,
Ministry of land and resources, department of industry and
information.
3. Gross Fixed Capital Formation
 The residence here refers to the building only for occupancy, for example,
villa, apartment and dormitory.
 Residential Construction=residential investment+ value-added of
Residential sales- corresponding fee in land requisition, purchase and
resettlement compensation.
 Value-added of Residential sales refers to the difference in the accounting
period between the sales value of residence and corresponding Investment
completed, i.e. cost of project before buildings being sold. The formula is
below.
 The fee in land requisition, purchase and resettlement compensation refer
to all kinds of land compensation fees and allowance for arrangement, that
land developers contribute to government in the situation of both remise
and transfer of the using right of State-owned land.
3. Gross Fixed Capital Formation
 Non-residential construction refers to the building not for
residence, for example, office, commercial business buildings,
factory and storeroom, public infrastructure. The formula is below.
 Non-residential construction= construction and installation of
Total Investment in Fixed Assets in the Whole Country
-investment in residential buildings
-cost of purchasing old buildings
-corresponding fee in land requisition, purchase and resettlement
compensation
+ value–added of non-residential construction sales.
3. Gross Fixed Capital Formation
 Machine and equipment refers to the equipments, tools and
machines which enterprise and administrative institution buy or
make by themselves and those reach the standard of fixed assets.
The computation formula is below.
 Machine and equipment= machine and equipment investment+
fixed assets investment below five hundred thousand Yuan- costs
purchasing old equipments.
3. Gross Fixed Capital Formation
 Land improvements costs refer to investment on program of
development of land reclaim which are examined and
arranged by all levels of administrative departments of land
resources. They are considered as part of gross fixed capital
formation.
3. Gross Fixed Capital Formation
 Mineral exploration costs refer to investment which is invested
by all sections and units of the whole society to explore mineral
resource. They are part of Intangible fixed asset.
 Computer software refers to the incomes from developing and
selling software. They also are part of Intangible fixed asset.
3. Gross Fixed Capital Formation
 Others: refers to the contents of gross fixed capital formation except
the contents above. Such as large animal livestock cultivation,
investment of tree and orchard, expenditure of national defense,
urban greening and other expenditures.
 Others= “Others” of Total Investment in Fixed Assets in the Whole
Country+ national defense fee- Land improvement costs- Mineral
exploration costs
3. Gross Fixed Capital Formation
 Residence and Non-residential construction deflated by
construction and installation price index of fixed assets
investment price index.
 Machine and equipment, deflated by equipment and instruments
purchasing price index of fixed assets investment price index.
 Land improvement cost, deflated by fixed assets investment price
index.
 Computer software, deflated by computer software price index of
retail price index.
4. Increase in inventories
 Increase in inventories= inventory value in the beginning of
the year-inventory value in the beginning of the year adjusted
And,
 Inventory value in the beginning of the year adjusted =
inventory value in the end of the year in accounting× related
price index
 Increase in inventories at current prices is computed by
industry.
4. Increase in inventories
 The increase in inventories in farming, forestry, animal
husbandry and fishing is estimated in two parts: enterprise and
farmer.
 (1) Increase in enterprise inventories.
Limited by the data source, currently, only the state-owned
enterprises increase in inventories is estimated.
 (2) Increase in farm family inventories: includes the increase in
the grazing of pig, sheep and fowl feed by farmer, also includes
the increase in grain reserves
4. Increase in inventories
 Increase in industrial inventories consists of industrial
enterprises above and below designated size.
 It is calculated using data from national economic census
in census years and estimated by census data in noncensus year. The value of inventories at the beginning is
adjusted by PPI.
4. Increase in inventories
 Increase in inventories on construction consists of two parts gained
from two kinds of enterprise. The first kind is construction
enterprises of both general contracting contractors and professional
contractors. The second kind is construction enterprises of work
subcontractors and other construction enterprises without
qualification criteria.
 Increase in inventories of the first kind is computed by their
financial table; and the second is estimated by economic census data.
The value of the inventories at the beginning of year is adjusted by
PPI.
4. Increase in inventories
 Increase in inventories on transport, storage and post
 Increase in inventories on transport, storage and post is calculated
by data of economic census in census years, estimated by finance
data of state-owned enterprises of the State-owned Assets
Supervision Administration Commission in non-census years. The
value of transport inventories at the beginning of the year is adjusted
by PPI of the means of production; the value of storage inventories
at the beginning of the year is adjusted by Retail Price Indices; the
value of post inventories at the beginning of the year is adjusted by
PPI.
4. Increase in inventories
 Increase in inventories on wholesale and retail trades
 Increase in inventories on wholesale and retail trades consists of
wholesale and retail enterprises above and below designated size.
Increase in inventories of wholesale and retail enterprises above the
designated size is computed by concerning financial term tables
obtained from Department of Trade and External Economic Relations of
NBS. Increase in inventories of enterprise below the designated size is
estimated by economic census data. The value of the inventories at
beginning is adjusted by Retail Price Indices.
4. Increase in inventories
 Increase in inventories on hotels and catering services
 Increase in inventories on hotels and catering services consists of hotels
and catering services enterprises above and below designated size.
Increase in inventories of hotels and catering services enterprises above
the designated size is computed by main financial term tables of
corporation units. Increase in inventories of enterprise below the
designated size is estimated by economic census data. The value of the
inventories at beginning is adjusted by Retail Price Indices, and Retail
Price Indices are obtained from Retail Price Index tables
4. Increase in inventories
 Increase in inventories on real estate
 Inventories in real estate industries include unsold building and building
materials. Contained in gross fixed capital formation, unsold building
should be deducted in the computation of increase in inventories
avoiding double count. Because it is difficult to deduct unsold building
from the inventories according to current data, unsold building is
considered to be 5% of inventories in real estate industry. Financial
terms statement of real estate enterprises is used in census years. Finance
data of state-owned enterprises of the State-owned Assets Supervision
Administration Commission is used to estimate in non-census years. The
value of inventories at beginning of year is adjusted using PPI of
industrial products.
4. Increase in inventories
 Other services refer to information transfer, computer services and
software; leasing and business services; scientific research, technical
service and geological prospecting; management of water conservancy,
environment and public facilities; services to household and other
services; education; health, social security and social welfare; culture,
sports and entertainment.
 Increase in inventories of these services is mainly calculated by
economic census data and finance data of state-owned enterprises of the
SASAC.
 The value of the inventories at the beginning is adjusted by CPI.
4. Increase in inventories
 Commonly, there are two methods to calculate the increase in
inventories on constant price. The first is inflated by price index. And
the second is direct computation by means of multiplying base-period
price by increment in accounting period.
 Increase in inventories of pig, sheep, domestic bird, rabbit and food is
calculated by first method.
 The others use the second method.
4. Increase in inventories
 Use agricultural products price index in agriculture, forestry, animal
husbandry and fishing industry.
 Use index of producer price of industrial products in industry, building
industry, transportation, storage industry and postal services.
 Use retail price index in retail and wholesale Industries, lodgings and
catering services.
 Use price index of investment in fixed assets in real estate.
 Use corresponding price index in retail price index in others.
5. Net Export of Goods and Services
 Net export of goods and services equals difference between export and
import of goods and services.
 The value of goods export and import is computed by free-on-board
price, services by market price when business actually occur. In
addition, the data calculated by USD should be converted to the data
calculated by CNY with annual average exchange rate.
 Export and import (CNY)= Export and import (USD) * annual average
exchange rate
5. Net Export of Goods and Services
 Most of import and export of goods price indices are the commodity
price indices authorized by Maritime Customs Administration. Also,
import commodity price indices should be adjusted according to
consumer price index of main import country or district.
 At present, china has not authorized import and export services price
index. In computation of services export at constant price, services
export at constant price refers to service items price index of consumer
price index, and the import of services price index refers to export of
services price index in American, Japan, Korea, Hong Kong and EU.