Explanatory
Notes on Main Statistical Indicators
Gross Domestic Product
(GDP) refers to the final products at market
prices produced by all resident units in a country (or a region) during a
certain period of time. Gross domestic product is expressed in three different
forms, i.e. value, income, and products respectively. GDP in its value form
refers to the total value of all goods and services produced by all resident
units during a certain period of time, minus the total value of input of goods
and services of the nature of non-fixed assets; in other term, it is the sum of
the value-added of all resident units. GDP in the form of income includes the
income created by all resident units and distributed to resident and
non-resident units. GDP in the form of products refers to the value of all
goods and services for final consumption by all resident units minus the net
exports of goods and services during a given period of time. In the practice of
national accounting, gross domestic product is calculated with three
approaches, i.e. production approach, income approach and expenditure approach,
which reflect gross domestic product and its composition from different
aspects.
Three Industries Classification of economic activities
into three branches of industries is a common practice in the world, although
the grouping varies to some extent form country to country. In
Primary industry: refers to agriculture, forestry, animal
husbandry and fishery.
Secondary industry: refers to mining and quarrying,
manufacturing, production and supply of electricity, water and gas, and
construction.
Tertiary industry: refers to all other economic activities
not included in primary or secondary industry.
Labourers Remuneration refers to the whole payment of various
forms earned by the labourers from the productive activities they are engaged
in. It includes wages, bonuses and allowances the labourers earned in monetary
form and in kind. It also includes the free medical services provided to the
labourers and the medicine expenses, traffic subsidies and social insurance,
housing fund paid by the employers. As the individual economy is concerned,
since the labourers remuneration is not easily distinguished from the operating
profit, both are treated as labourers remuneration.
Net Taxes on Production refers to the difference of the taxes on
production minus the subsidies on production. The taxes on production refers to
the various taxes, extra charges and fees levied on the production units on
their production, sale and business activities as well as on the use of some
factors of production, such as fixed assets, land and labour force in the
production activities they are engaged in. In contrast to the taxes on production,
the subsidies on production refer to the unilateral government transfer to the
production units and are therefore regarded as negative taxes on production.
They include subsidies on the loss due to implementation of government
policies, price subsidies, etc.
Depreciation of Fixed
Assets refers to the depreciation of fixed
assets of a given period, drawn in accordance with the stipulated depreciation
rate for the purpose of compensating the wear loss of the fixed assets or the
depreciation of fixed assets calculated in a fictitious way in accordance with
the stipulated unified depreciation rate in the national economic accounting
system. It reflects the value of transfer of the fixed assets in the production
of the current period. The depreciation of fixed assets in various enterprises
and institutions managed as enterprises refers to the depreciation expenses
actually drawn. In government agencies and institutions not managed as
enterprises which do not draw the depreciation expenses, as well as for the
houses of residents, the depreciation of fixed assets is the imputed
depreciation, which is calculated in accordance with the stipulated unified
depreciation rate. In principle, the depreciation of fixed assets should be
calculated on the basis of the re-purchased value of the fixed assets. However,
there is no actual condition to re-evaluate all the fixed assets in
Operating Surplus refers to the balance of the value added
created by the resident units deducting the labourers remuneration, net taxes
on production and the depreciation of fixed assets. It is equivalent to the
business profit of the enterprises plus subsidies on production, but the wages
and welfare expenses paid from the profits should be deducted.
GDP by Expenditure
Approach refers to the method of measuring the
final results of production activities of a country (region) during a given
period from the perspective of final use. It includes final consumption, total
capital formation and net export of goods and services, i.e.:
GDP by expenditure approach = final consumption + total
capital formation + net export of goods and services
Final Consumption refers to the total expenditure of
resident units for purchases of goods and services from domestic economic
territory and abroad to meet the requirements of material, cultural and
spiritual life. It excludes the expenditure of non-resident units on
consumption in the economic territory of the country. The final consumption is
broken down into household consumption and government consumption.
Households Consumption refers to the total expenditure of
resident households on the final consumption of goods and services. In addition
to the consumption of goods and services bought by the households directly with
money, the households consumption also includes expenditure on goods and
services obtained by the households in other ways, i.e. the so-called imputed
consumption expenditure, which includes the following: (a) the goods and
services provided to the households by the employer in the form of payment in
kind and transfer in kind; (b) goods and services produced and consumed by the
households themselves, in which the services refer only to the owner-occupied
housing and domestic and individual services provided by the paid household
workers; (c) financial intermediate services provided by financial
institutions; (d) insurance services provided by insurance companies.
Government Consumption refers to the expenditure on the
consumption of the public services provided by the government to the whole
society and the net expenditure on the goods and services provided by the
government to the households free of charge or at low prices. The former equals
to the output value of the government services minus the value of operating
income obtained by the government departments. The latter equals to the market
value of the goods and services provided by the government free of charge or at
low prices to the households minus the value received by the government from
the households.
Total Capital Formation refers to the fixed assets acquired
minus those disposed of and the net value of inventory, including the total
fixed capital formation and the increase in inventory.
Total Fixed Capital
Formation refers to the value of fixed assets
acquired minus those disposed of during a given period. Fixed assets are the
assets produced through production activities with specified unit value which
could be used for over one year, excluding natural assets. Total fixed capital
formation can be categorized into total tangible capital formation and total
intangible capital formation. The total tangible capital formation include the
value of the construction projects, installation projects completed and the
equipment, apparatus and instruments purchased as well as the value of land
improved, the value of draught animals, breeding stock, animals for milk, wool
and for recreational purpose, and the newly increased forest with economic
value during a given period. The total intangible capital formation includes
the prospecting of minerals, the acquisition of computer software minus the
disposal of them.
Increase in Inventory refers to the market value of the change
in inventory of resident units during a given period, i.e. the difference of
value between the beginning and the end of the period minus the current gains
due to the change in prices. The increase in inventory can be positive or
negative. A positive value indicates the increase in inventory while a negative
value indicates the decrease in stock. The inventory includes the raw
materials, fuels and reserve materials purchased by the production units as
well as the inventory of finished products, semi-finished products,
work-in-progress, etc.
Net Export of Goods and
Services refers to the difference of the exports
of goods and services minus the imports of goods and services. The imports include the value of various
goods and services sold or gratuitously transferred by the resident units to
the non-resident units. The imports include the value of various goods and
services purchased or gratuitously acquired by the resident units from the
non-resident units. Because the provision of services and the use of them
happen simultaneously, the acquisition of services by the resident units from
abroad is usually treated as import while the acquisition of services by
non-resident units in this country is usually treated as export. The export and
import of goods are calculated at FOB.
Direct Input Coefficient refers to the volume of products and
services of industry i, which is consumed directly by industry j in the course
of its production or business, recorded as aij (i,j=1,2, … ,n). The direct
input coefficient table or direct input coefficient matrix, usually denoted as
A, is a table that presents direct input coefficients of all industries.
Total Input Coefficient refers to the volume of products and
services of industry i which is consumed directly and indirectly by industry j
in producing each unit of final use. The total input coefficient table or total
input coefficient matrix, usually denoted as B, is a table that presents total
input coefficients of all industries.
Institutional Units refer to economic entities that are in a
position to own assets and incur liabilities, to engage independently in
economic activities, and to conduct transactions with other entities.
Institutional Sectors refer groups of institutional units that
are homogenous in nature. Following 4 institutional sectors are identified in
the flow of fund accounts: non-financial corporations, financial institutions,
governments and households, Also treated as an institutional sector is the rest
of the world, which is composed of non-resident units that have economic
relations with the resident units.
Non-Financial Corporations
and the Sector of Non-Financial Corporations
Non-financial corporations refer to resident corporations that are
engaged in the production of goods and the provision of non financial services
in the market, mainly covering corporate enterprises of various types engaged
in the above-mentioned activities. All non-financial corporations make up the
sector of non-financial corporations.
Financial Institutions and
the Sector of Financial Institutions
Financial institutions refer to resident institutions that are engaged
in the financial intermediate services or auxiliary financial activities that
are closed related with financial intermediate services, mainly covering
central banks, commercial banks, policy-related banks, non-banking credit
institutions and insurance companies. All financial institutions make up the
sector of financial institutions.
Government Units and the
Sector of Governments Government units
refer to legal entities and their auxiliary units within the
Households and the Sector
of Households Households refer to resident individuals
or groups of resident individuals who share common living facilities, pool
together entire or part of their income and properties at their common
disposal, and share their housing, food and other consumer goods and services.
All households make up the sector of households.
Non-resident Units and the
Rest of the World Non-resident
units refer to of units that are of a non-resident nature. All non-resident
units that have transactions with resident units make up the sector the rest of
the world.
Total Income of Primary
Distribution Primary distribution refers to the
distribution of net results from production activities among the owners of
factors of production and the governments. Factors of production include labour
force, land and capitals. Owners of labour force gain remuneration by providing
labour. Owners of land receive rents from leasing of land. Owners of capitals
get income of various forms depending on the type of capitals: bankers receive
income from interest and share holders receive dividends or non-distributed
profits. Governments either gain production tax or pay for subsidies by participating
directly or indirectly in the production process. Results of primary
distribution generate the total income of primary distribution of each sector,
and the sum of the total income of primary distribution of all sectors make up
the gross national income, or the gross national product.
Current Transfers Transfer refers to the transaction of
provision of goods, services or assets by an institutional unit to another
institutional unit without receiving any goods, services or assets in return
from the recipient. Current transfers refer to all kinds of transfers other
than capital transfers, including income tax, payment to social securities,
social allowances and other current transfers.
Total Disposable Income Total income of primary distribution is
re-distributed through current transfer, resulting in the total disposable
income of various institutional sectors. The sum of total disposable income of
all institutional sectors makes up the total national disposable income.
Total Savings refer to the total disposable income
minus the final consumption. Total savings of all sectors make up the total
national savings.
Capital Transfer refers to the free payment from one
sector to another sector for non-financial capital formation, and is a
transaction that seeks no return from the recipient. The capital transfer
differs from the current transfer in 2 aspects: 1) The purpose of the capital
transfer is investment rather than consumption. 2) The capital transfer
features the transfer of the ownership of the assets other than inventory and
cash, and the capital transfer in its monetary form involves the disposal of
assets other than inventory. Capital transfer includes investment subsidies and
other capital transfers.
Net Financial Investment reflects the surplus or shortage of
capitals of institutional sectors or of the economy in general. It refers to
total savings plus the income from capital transfer minus payment for capital
transfer and the non-financial investment from the point of view of physical
transaction. In terms of monetary transaction, it is the difference between the
increase in financial assets minus the increase of the financial liabilities.
Currency in Circulation refers to currency that is in
circulation in the market, including local and foreign currencies.
Deposits refer to credit transactions by which
financial institutions accept deposits from clients who could withdraw their
deposit at any time or by agreed time frame. They include current deposit,
fixed deposit, household savings deposit, government deposit, foreign exchange
deposit and other deposits.
Loans refer to credit transactions by which
financial institutions lend their capital to clients at certain level of
interest rates, which the latter will repay by agreed time frame. They include
short-term loans, medium and long-term loans, government loans, foreign
exchange loans and other loans.
Securities (excluding
stocks) refer to written certificates
representing creditors’ rights, purchased by bond holders or owned by selling
products, which can be transacted at the financial markets. They include
government bonds, financial bonds, corporation bonds, commercial drafts,
preferential stocks that provide fixed income without the right to share the
residual value of corporations, etc.
Stocks and Other Holding
Rights refer to the rights by stockholders and
direct investors on the net assets of corporations they invested in. Stocks
refer to negotiable securities on creditor’s rights, issued by stock companies
certifying the investment by stockholders and their rights and duties depending
on their stocks. Other holding rights refer to the direct investment by
institutional units to other units in forms other than stocks and negotiable
securities on creditor’s rights, including tangible assets such as land,
buildings, machines and equipment, inventory, resources, etc., and intangible
assets such as trade marks, patents, rights on land use, licenses, commodity
credit, and the capitals. Documents on holding rights usually include
certificates on creditor’s right, certificates on investment or on
participation, etc.
Insurance Reserve Funds refer to reserve fund for life
insurance, the net pension fund, advance payment of premium and non-claimed
reserves.
Settlement Fund refers to bank fund of financial
institutions for settlement that is in the process of remittance.
Transactions Between
Financial Institutions refer to flow of
capital between financial institutions, including inter-bank deposits and
loans.
Reserve Funds refer to savings of financial
institutions in the central bank and designated reserves to the central bank.
Loans from the Central
Bank refer to loans from the central bank to
financial institutions.
Current Account includes goods, services, earnings and
current transfers.
Import and Export of Goods refer to imported or exported goods
through Chinese customs. Both import and export of goods are valued at free on
board (f.o.b.) prices. Free on board prices can be regarded as the purchaser’s
prices paid by importers when claiming goods at the boarder of the exporters.
When the importer claim the imported goods, the goods have been loaded in
importer’s carriers or other carriers, and the exporter has paid export duty or
received export redeem.
Import and Export of
Services refers services provided between
resident and non-resident units, including services on transportation, tourism,
communications, construction, insurance, banking, computer and information,
consultation, advertisements and publicity, as well as film, audio and video
services, royalty for patents, trademarks and other special rights, other
commercial services, and government services.
Earnings refers income from provision of factors
of production between resident and non-resident units, including compensation
of labours and earnings from investment. Earnings from investment include
earnings from and expenses on direct investment, security investment and other
investment, as well as reinvestment of earnings from direct investment.
Capital Account includes capital transfers such as
immigration transfer, reduction or exemption of debts, etc.
Financial Account includes direct investment, security
investment and other investments.
Direct Investment refers to investment by foreign
investors or investors from
Security Investment refers to the issue of stocks and
securities by
Other Investment refers to all external transactions on
financial assets and liabilities other than direct investment and security
investment, including trade credits, loans, currency, savings and other assets,
provided by foreign countries to
Reserve Assets, Net
Increase refers to the net balance between the
end of the reference year and the end of the previous year, in the gold
reserve, foreign exchange reserve, special drawing rights in the International
Monetary Fund, and the use of the Funds credits. The increase in the reserve
assets is expressed in negative figure and the decrease in the reserve assets
is expressed in positive figure.