Investment and Fixed Assets

National Bureau of Statistics of China 2002-05-17 09:54 Print| Large| Medium| Small

Total Investment in Fixed Assets in the Whole Country Investment in fixed assets is the essential means for social reproduction of fixed assets. By means of construction and purchase of fixed assets, more advanced technologies and equipment are adopted in the national economy, and new sectors are established, which promote the adjustment of economic structure and the regional distribution of productive forces and enhance the economic strengths so as to provide the material conditions for improving people’s livelihood. This is significant for speeding up the drive of socialist modernization in China.

Amount of investment in fixed assets refers to the volume of activities in construction and purchases of fixed assets in monetary terms. It is a comprehensive indicator which shows the size, pace, proportional relations and use orientation of the investment in fixed assets. Total investment in fixed assets in the whole country includes, by registration type of ownership, the investment by the state-owned units, collective units, individuals, joint ownership units, share-holding units, as well as investment by businessmen from foreign countries and from Hong Kong, Macau and Taiwan, and by other units. According to China’s current management system, the investment in fixed assets in the whole country is classified into the following four parts: investment in capital construction, investment in innovation, investment in real estates development and other investment in fixed assets.

Investment in Capital Construction Capital construction refers to the new construction projects or extension projects and the related work of the enterprises, institutions or administrative units mainly for the purpose of expanding production capacity or improving project efficiency covering only projects each with a total investment of 500,000 RMB yuan and over. It includes: (1) projects listed in the capital construction plan of the current year of the central government and the local governments at various levels as well as the projects, though not listed in the capital construction plan of the current year, but continued to be constructed in this year, using the investment listed in the plan of capital construction of previous years and carried forward to this year (also using the equipment and materials kept in stock of the capital construction); (2) new construction projects arranged both in the plan of capital construction and the plan of innovation; extension projects with the newly increased production capacity (or project efficiency) up to the standard of a large and medium-sized project; and the projects of moving the whole factory to a new site so as to improve the distribution of productive forces; (3) new construction projects, extension projects or restoration projects with the total investment of 500,000 RMB yuan and over by the state-owned units, though listed neither in the plan of capital construction nor in the plan of innovation; the projects in the state-owned units of moving the whole factory to a new site so as to improve the distribution of productive forces; and the projects of building additional business houses by the administrative units and institutions and building welfare facilities by the administrative units.

Investment in Innovation Innovation refers to the renewal of fixed assets and technological innovation of the original facilities by the enterprises and institutions as well as the corresponding supplementary projects and the related work (excluding major overhaul and maintenance projects) covering only projects each with a total investment of 500,000 RMB yuan and over. It includes: (1) projects listed in the innovation plan of the current year of the central government and the local governments at various levels as well as the projects, though not listed in the innovation plan of the current year, but continued to be constructed in this year, using the investment listed in the plan of innovation of previous years and carried forward to this year; (2) projects of technological innovation or renewal of the original facilities, arranged both in the plan of innovation and in the plan of capital construction; extension projects (main workshops or a branch of the factory) with the newly increased production capacity (or project efficiency) not up to the standard of a large and medium-sized project; and the projects of moving the whole factory to a new site so as to meet the requirements of urban environmental protection or safe production; (3) projects of reconstruction or technological innovation with the total investment of 500,000 RMB yuan and over by the state-owned units, though listed neither in the plan of capital construction nor in the plan of innovation; the projects in the state-owned units of moving the whole factory to a new site so as to meet the requirements of urban environmental protection or safe production.

Investment in Real Estate Development It includes the investment by the real estate development companies, commercial buildings construction companies and other real estate development units of various types of ownership in the construction of house buildings, such as residential buildings, factory buildings, warehouses, hotels, guesthouses, holiday villages, office buildings, and the complementary service facilities and land development projects, such as roads, water supply, water drainage, power supply, heating, telecommunications, land leveling and other projects of infrastructure. It excludes the activities in simple land transactions.

Other Investment in Fixed Assets refers to the construction and purchases of fixed assets not listed in the investment in capital construction, investment in innovation and investment in real estate development. It includes:

A) The following projects of the state-owned units with the total planned (or actually needed) investment of 500,000 yuan and over, which are not included in the plan of capital construction and the plan of innovation: (1) projects of oil fields maintenance and exploitation with the oil fields maintenance funds and petroleum development funds; (2) opening and extending projects with the maintenance funds in coal, ore and other mining enterprises and logging enterprises; (3) project of reconstruction of the original highways and bridges with the highway maintenance funds in the department of communication; (4) projects of construction of warehouses with the funds of simple construction in the commercial department.

B) The investment in fixed assets by urban collective units: refer to projects of construction and purchases of fixed assets with the planned total investment of 500,000 yuan and over by all collective units in cities and county towns and in townships which are approved by the State Council or provincial governments, excluding investment by collective units under township enterprise administration offices.

C) The projects of construction and purchases of fixed assets by the enterprises, institutions or individuals other than those mentioned above with total investment of 500,000 yuan and over, which are not included in the plan of capital construction and the plan of innovation.

Private Investment in House Construction in Urban Areas, Industrial and Mining Areas and Individual Investment in Rural Areas The private house construction in the urban areas and industrial and mining areas includes all the private house construction under the jurisdiction of cities, counties, towns and industrial and mining areas, no matter whether the owner of the house is registered as the permanent resident in the locality or not. The individual investment in the rural areas includes the investment in house construction and purchase of productive fixed assets by the individuals in the rural areas.

Sources of Funds for Investment in Fixed Assets state budgetary appropriation, domestic loans, foreign investment, self-raised funds, and others.

(1)State budgetary appropriation refers to appropriation in the budget of the central and local governments earmarked for capital construction and for innovation projects, and the special appropriation from the budget of the central government for capital construction and for the transfer fund to banks to be issued as loans for capital construction projects.

(2)Domestic loans refer to various funds borrowed by enterprises and institutions from banks and non-bank financial institutions during the reference period for the purpose of investment in fixed assets, including loans issued by banks from their self-owned funds and deposit, loans appropriated by higher responsible authorities, special loans by government (including loan for replacing petroleum with coal, special loan for reform-through-labour coal mines), loans arranged by local government from special funds, domestic reserve loan, and working loan, etc..

(3) Foreign Investment refers to foreign funds received during the reference period for the purpose of investment in fixed assets, including foreign funds borrowed and managed by the government, by individual units, foreign fund in joint venture program, and issue of bonds and stocks at the international financial markets. The foreign funds borrowed and managed by the government refer to foreign loans borrowed by the government from foreign governments, organizations, or financial institutions under official agreements signed by both parties, under which government is responsible for the repayment of both the principal and interests of the foreign loans.

(4)Self-raised funds refer to funds received by construction enterprises from their higher responsible authorities, local governments, or raised by enterprises or institutions themselves for the purpose of investment in fixed assets during the reference period.

(5) Others refer to funds received during the reference period which are not included in the above-mentioned sources.

Investment in Fixed Assets by Sector The classification of construction projects by sector is determined by the major products or the purpose of the projects when they are put into production or use, and by the nature of their social economic activities. The investment in capital construction is classified by construction projects, while investment in innovation, other investment by state-owned units and urban collective units are classified according to the sector which the whole enterprise or institution belongs to. In general, one project or one enterprise or institution can only belong to one sector. In order to reflect more accurately the proportions among various sectors, the branch factories of integrated complex are classified into different sectors according to their economic activities.

Investment in Fixed Assets by Type of Construction The construction projects in general can be classified by the type of construction into new construction, expansion, reconstruction and moving away. In capital construction, the type of construction is determined by the condition of the project. In investment in innovation, in other investment by state-owned units and investment by collective-owned units, the type of construction is determined by the condition of the whole enterprise or institutions. Investment by type of construction is not applied to investment by real-estate development units, investment in rural areas and investment in housing by urban individuals.

(1)New construction in general refers to newly constructed units. In the case in which the value of the original fixed assets is quite small, and the value of newly added fixed assets exceeds the original ones by three times, the expansion construction is considered as new construction.

(2)Expansion refers to construction of new major production workshop or independent production line within a factory or in other locations, or construction of a branch factory so as to increase the production capacity of the original products. Newly constructed business houses in institutions and administrative organizations (such as the newly constructed teaching buildings in schools, clinics or bed building in hospitals, and office buildings in administrative agencies, etc.) are also classified as expansion.

(3) Reconstruction refers to technical innovation and transformation of the existing equipment and technical conditions undertaken by enterprises and institutions for the purposes of technological advancement, improvement in product quality, enlarging variety of products, promoting new generation of products, reducing production consumption and cost, promoting comprehensive utilization of resources, strengthening treatment of waste gas, waste water and solid wastes, and safety in production, etc. through application of new technologies and techniques, use of new equipment and new materials (including accessory facilities for production or for living and welfare purposes).Construction of new workshops for improving existing production capacity rather than increasing production capacity is also considered as reconstruction.

Investment in Fixed Assets by Structure refers to the three major parts of investment activities, i.e. construction and installation, purchase of equipment and instrument, and other expenses.

(1) Construction and installation (work volume of construction and installation) refers to the construction of various houses and buildings and installation of various kinds of equipment and instruments, including construction of various houses, equipment foundations and industrial kilns and stoves, preparation works for project construction, and clearing up works post project construction, pavement of railways and roads, drilling of mines and putting up of oil pipes, construction of projects of water conservancy, construction of underground air-raid shelters and construction of other special projects, installation of various machinery equipment, testing operation for pre-testing the quality of installation projects. The value of equipment installed is not included in the value of installation projects.

(2)Purchase of equipment and instruments refers to the total value of equipment, tools, and vessels purchased or self-produced which come up to standards for fixed assets. Equipment, tools and vessels purchased or self-produced for new workshops by newly established or expanded units are categorized as ”purchase of equipment and instruments” no matter whether they come up to the standards for fixed assets or not.

(3)Other expenses refer to expenses occurring during the construction or purchase of fixed assets other than construction, installation or purchase of equipment and instruments.

Capital Construction Projects by Size The classification of size of capital construction projects should be determined according to the total scale or total investment set in the approved construction plan by higher responsible authorities or in the tentative design, otherwise according to the total scale or total investment set in the current capital construction plan of the state, provinces, autonomous regions, and municipalities directly under central government. Industrial projects which produce unitary products are classified according to its design capacity of products; projects which produce multi-products are classified by the design capacity of the major product or by the total planned investment. Standards for the Classification of Construction Projects into large, medium-sized and small ones issued by the government are the base for size division of construction projects, which was revised five times in 1958, 1962, 1972, 1977, and 1979 respectively and therefore, data on projects by size are not entirely comparable from year to year.

Projects under Construction refer to projects having construction and installation activities undertaken in the reference period, including projects started in the reference period, or continued from the previous period, or completed and put into production or suspended in the reference period.

Projects Completed and Put into Use Industrial projects refer to the major projects and accessory facilities completed which result in forming production capacity and have been checked and accepted while the living and welfare facilities have been completed and can ensure normal production and formally put into production. Non-industrial projects refer to the major projects and accessory facilities completed which possess the designed capacity and have been checked, accepted and formally put into production.

Newly Increased Production Capacity refers to the increase of designed capacity and project efficiency through investment in fixed assets, which reflects the accomplishment of investment in fixed assets in kind. The calculation of newly increased production capacity is based on individual project which operates independently and efficiently. When an individual project is completed and checked and accepted and put into production, it is counted as newly increased production capacity.

The newly increased production capacity and project efficiency are usually expressed in one of the following forms:

(1)annual production capacity, such as extraction of coal and petroleum;

(2)raw material processing capacity, such as ore dressing capacity of ore dressing projects, the dressing capacity of a coal washery;

(3)number or capacity of major equipment increased, such as the number of cotton spindles increased and the capacity of generating sets increased;

(4)physical measures of construction, such as volume, capacity, area, and length, for instance, the capacity of reservoirs, the length of railways or highways.

Newly increased production capacity in terms of quantity is calculated in designed capacity in general, which refers to the production capacity of a project under normal conditions designed in construction documents regardless of the actual output.

Floor Space of Buildings under Construction and Completed refers to total floor space in each story of buildings calculated from the outside line of building walls, including both usable space and the space occupied by constructions like pillars or walls. The floor space of multi-story buildings includes the total floor space of each story (including basement).

Floor Space of Residential Buildings refers to the floor space of the residential buildings under construction and completed among the total space of buildings under construction and completed.

Floor Space under Construction refers to total floor space of all buildings under construction during the reference period, including floor space of newly started buildings during the reference period, floor space of construction extended from the previous period to the current period, floor space of construction suspended during the previous period and resumed in the current period, floor space of construction completed in the current period, and floor space of construction started and then suspended in the current period.

Floor Space of Buildings Completed refers to the floor space of buildings completed in the reference period, which have come up to the designed standards and have been put into use.

Completion Rate of Floor Space of Buildings refers to the ratio of the floor space of buildings completed in certain period of time to the floor space of buildings under construction in the same period which reflects the investment result and economic efficiency of the construction industry from the angle of the speed of project construction.

Newly Increased Fixed Assets refer to the newly increased value of fixed assets through investment, including the value of projects completed and put into production, the value of equipment, tools, and vessels considered as fixed assets, as well as the relevant expenses as investment in fixed assets. This is a comprehensive indicator of investment in fixed assets, reflecting the achievements of investment in fixed assets in different periods, different sectors, and different regions.

Rate of Construction Projects Completed and Put into Use refers to the ratio of the number of construction projects completed and put into use in certain period of time to the number of projects under construction in the same period. This reflects the investment efficiency from the angle of the speed of projects construction.

Rate of Projects of Fixed Assets Completed and Put into Operation refers to the ratio of the newly increased fixed assets to the total investment made in the same period. This is a comprehensive indicator, reflecting the speed of the employment of fixed assets and the investment efficiency.