New Features of Chinas National Accounts

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New Features of Chinas National Accounts XU
Xianchun National Bureau of Statistics of
China (12 October, 2006)
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Contents I. GDP Estimation in China after the
2004 Economic Census II.
Problems existed in Chinas National Accounts
III. Blueprint for further
Development of Chinas National Accounts
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I. GDP Estimation in China after the 2004
Economic Census

• (I) GDP Estimation in the year of Economic
  Census
• (II) Historical GDP revision

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(I) GDP Estimation in the year of Economic Census

• Improve the coverage of production estimation
• Further breakdown of classification
• Additional source data
• Method revision for GDP estimation in 2004
• Updating treatment on specific issues
• 2004 GDP change from the revision

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• GDP Estimation in the year of Economic Census
• 1. Improve the coverage of production estimation
• (1) Better coverage by using data from the
  Economic Census
• Service enterprises not available in regular
  statistics
• Administrative or institutional units not
  available in regular statistics
• Non-registered individual business operators
  (40.1)
• Secondary activities which is different from the
  primary activities of enterprises
• (2) Better coverage by using data from households
  budget survey
• Housing services of (rents on) owner-occupied
  dwellings
• Domestic services tutors, nannies, etc.

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• 2. Further breakdown of classification
• Industrial classification
• Before the first Economic Census 26
• In the first Economic Census year 94
• (2) Expenditure classification
• Before the first Economic Census
• Household consumption rural and urban
• Import and Export goods and services
• In the first Economic Census year
• Household consumption rural 11 and urban 12
• Import and Export goods 3 and services 8
• (3) Institutional sector classification
• Before the first Economic Census 5
• In the first Economic Census year 11

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• 3. Additional source data
• Financial statements of enterprises
• a. Financial data available in regular statistics
• Industrial enterprises above designated level
• Construction enterprises with qualification of
  any level granted by the government (grading
  system)
• Wholesale and retail trade, restaurants above
  designated level
• b. Financial data non-available in regular
  statistics
• Industrial, construction, trade, restaurant
  enterprises under cut-off level
• Some service enterprises, including business
  services, renting services, computer services,
  information transmission services, households
  services, etc.
• c. Specific questionnaires on financial and
  operational situations were designed to collect
  the missing data in item b

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(2) Financial Statements of administrative and
institutional units a. Regular data
sources Government budgetary statistics plus
administrative records from relevant
institutions Problems Not detailed enough or
incomplete b. Specific questionnaires on
financial situations of the above institutions
are designed to collect the corresponding missing
data
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(3) Data on individual business operators a.
Regular data source Administrative records from
the Industrial and Commercial Management
authorities Problems Considerable
individual business operators did not register
with government (40.1) b. Specific
questionnaires are designed to collect the
corresponding missing information
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(4) Data on secondary activities of
enterprises a. Non-available in regular
statistics b. Specific questionnaires are
designed for the first Economic Census
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• 4. Method revision for GDP estimation in 2004
• Changes of data sources results in changes of
  methods.
• Replacing extrapolations based on relevant
  indicators by direct data from the census
• Estimating GDP by three approach independently

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• 5. Updating treatment on specific issues
• (1) Treatment on financial intermediate services
• Before the economic census, net interests payable
  of production units are treated as intermediate
  input of industries. The deposit-interests of
  households is added to the value-added of
  financial industry
• b. In the year of economic census, the output of
  financial intermediate services (FISIM) is
  allocated across industries and final consumption
  components. Deposit-interests of households is
  no-longer treated as part of the value added of
  financial industry

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• (2) Capitalisation of software expenditures
• Before economic census, the treatment of software
  expenditure is not clearly specified as fixed
  capital formation or as intermediate input
• b. In the year of economic census, software
  expenditures are clearly specified as fixed
  capital formation

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• (3) Revision on estimation of depreciation of
  owner-occupied dwellings
• Before economic census, the stock of
  owner-occupied dwellings is valued at historical
  cost the depreciation rate for rural households
  is 2, while that for urban households is 4
• b. In the year of economic census, the stock of
  owner-occupied dwellings is valued at current
  construction cost the depreciation rate for
  rural households is 3, while that for urban
  households is 2

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• 6. Change of GDP compare to the traditional
  method
• Aggregates the level of GDP has increased from
  13,688 billion Yuan to 15,988 billion Yuan. The
  increment is 2,300 billion Yuan that accounts
  16.8 of the pre-revised GDP
• (2) Composition The percentage of the tertiary
  industry over GPD has increased 8.8, form 31.9
  to 40.7

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(II) Historical GDP revision 1. The coverage
(1) GDP by production approach (2) GDP by
expenditure approach 2. Time series (1)
Production approach Revision due to census
19932003 Revision due to other reasons
19532003 (2) Expenditure approach 19782003
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• 3. Impact on GDP due to historical revision
• Aggregates annual average change of level is 742
  billion Yuan, annual average change of growth
  rate is 8.3. Of which, level changed in 2003 is
  1,843 billion Yuan, while growth rate change is
  15.7
• (2) Composition the percentage of the tertiary
  industry over GDP averagely increased 4.5 per
  year. Of which, it increased 8.1 in 2003 from
  33.4 to 41.5
• (3) Growth rate annual average change of growth
  rate is 0.5 percentage

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Table 1Historical Revision of Chinas GDP
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• II. Problems existed in Chinas National Accounts
• (I) GDP estimation
• 1. Services statistics on regular basis
• No regular surveys for some service enterprises
  and individual business operators, especially
  short of information on new emerging activities
  including data transmission, computer services,
  renting, business services, property management
  etc.
• (2) Administrative records from corresponding
  management authorities are confined to units
  under its supervision. And the information are
  mainly in physical term rather than monetary
  term, which can not satisfy the needs of deriving
  value-added of service industries

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• 2. Volume measures
• No SPPIs
• No trade price indices for services

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• 3. Quarterly GDP estimation
• Current quarterly GDP is derived by production
  approach, no quarterly GDP by expenditure
  approach has been formally conducted for the
  moment
• (2) Current quarterly GDP is on cumulative basis
  rather than on discrete bases.

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• 4. Regional GDP estimation
• Considerable gap between national estimation
  and the sum of regional estimation
• Since 1992, national growth rates of GDP based on
  regional data are always higher than that
  calculated directly by NBS
• Since 1996, the level of GDP from the aggregation
  of regional data is always higher than that
  estimated directly by NBS

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(II) Other Problems Input-Output Direct
decomposition method rather than commodity flow
method Flow of Funds Balance Sheet Too broad
classification in terms of institutional sectors
and transaction items Considerable gaps of data
requirement
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• III. Blueprint for further Development of Chinas
  National Accounts
• (I) GDP estimation
• 1. Services statistics on regular basis
• Establish regular sample survey for industries of
  computer services, software, renting activity,
  business services, households services etc. and
  for individual business operators
• Improve administrative records by cooperation
  with corresponding authorities
• 2. Volume measures
• SPPIs are in the process of research

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• 3. Quarterly GDP estimation
• Formally establish quarterly GDP estimation by
  expenditure approach
• Gradually establish quarterly GDP estimation on
  discrete basis by improving basic statistics on
  investment and prices
• 4. Regional GDP estimation
• Directly estimated by NBS or by some of the
  provinces selected by NBS

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• (II) Institutional sector accounts
• Further breakdown of institutional sectors
• Non-financial corporationsindustries, other NFCs
• Financial institutionsbanks, securities,
  insurance, other FIs
• Governmentcentral, local
• Householdsrural households, urban households

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2. More detailed indicators More specific details
for property incomes, and for taxes on production
and imports 3. Improving compilation method for
institutional account
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Thank you for your attention!