National Accounts

Brief Introduction

Statistics on national accounts include mainly four components, namely, gross domestic product, input-output table, flow of fund table and balance of payment.

I. Gross Domestic Product

The data on GDP and its industrial composition are calculated by the Department of National Economic Accounting, National Bureau of Statistics (NBS) with various approaches in the light of the features of various sectors and the data sources. The value added in some sectors is calculated with the production approach. The value added in other sectors is calculated with the income approach. Finally, the GDP is the result of the sum of the value added of various sectors. This is the standard data of GDP. the GDP calculated with the expenditure approach equals to the sum of final consumption, total capital formation and the net export of goods and services. However, the GDP data obtained with expenditure approach is not equal to the standard data of GDP calculated with the method mentioned above. The difference between the two figures is called statistical discrepancy. To avoid confusion in use the concerned indicators, the following names of the indicators are stipulated by the Department of National Economic Accounting, NBS: (1) the GDP calculated with the production approach and the income approach is simply called GDP; (2) the index of GDP calculated with the production approach and the income approach is simply called the index of GDP; (3) the GDP calculated by expenditure approach is called GDP calculated with expenditure approach. The gross national product can be calculated as the sum of the standard data of GDP and the net factor income from abroad.

Data on the national accounts of the latest year published in the yearbook are not final and are subject to changes. When it happens to be a census year, the data of GDP of the past years may also be revised. In 1995, the GDP figures of the past years were adjusted in accordance with the result of the first tertiary industry census. Data published in this yearbook are the adjusted data.

Regional data in this yearbook are prepared according to the data of national accounts provided by the statistical bureaus of the provinces, autonomous regions and municipalities directly under the central government. The sum of the regional data is not equal to the national total.

II. Input-output Table

The 1997 input-output table of China included in this chapter are compiled by the Department of National Accounts of the National Bureau of Statistics. The layout of the 1997 input-output table of China is consistent with the 1992 input-output table (please refer to the sector input-output table). Features and changes of the 1997 input-output table is summarized as follows.

1) in terms of the layout of the table, the 1997 input-output table of China has maintained the division of material production sectors vs. non-material production sectors, in order to facilitate the conversion of national accounts statistics compiled under the old and the new accounting system and to keep the comparability of time series of input-output data.

2) in terms of indicators selected for the table, nomenclature and concepts of indicators in the 1997 input-output table of China were revised and standardized in the light of the requirements of the national accounts system, in order to ensure the internal consistency of the Chinese national accounts system. For instance, government consumption is used to replace social consumption, and final consumption is used to replace aggregate consumption. Names of industries and sectors are kept consistent with corresponding nomenclature in the new national accounts system of China. As a result, the layout of the Table is standardized and various components of the national accounts system become more harmonized and coordinated.

3) in terms of the size of the table, the size and classification of the 1997 input-output table is designed in line with the new ndustrial classification of China Industrial Classification and Codes of the National Economy, GB/T4754-94, in order to meet the needs of Chinas economic development and the macroeconomic analysis. It is, on the one hand, fully compatible with the current accounting and statistics coverage, and on the other hand, basically comparable with the main category classification of the 1992 input-output table. The 1997 input-output table has 124 industries, or 5 industries more than the 1992 table. It is worth mentioning that the industries are designed in line with the principles of the industrial classification of the 1997 input-output table, rather than a simple change in the number of industries out from the 1992 input-output table. Among the 124 industries, there are 5 industries for agriculture, 8 industries for mining and quarrying, 72 industries for manufacturing, 1 industry for wastes and residuals, 3 industries for the production and supply of power, gas and water, 1 industries for construction, 10 industries for the material and non-material sectors of transportation, 1 industry for storage, 2 industries for post and telecommunications, 2 industries for trade and catering service, and 19 industries for other services.

The 1997 input-output table of China is the fifth input-output table compiled by the National Bureau of Statistics, the four preceding ones being the input-output tables of 1987, 1990, 1992 and 1995. To facilitate readers in understanding the basic framework of the input-output table in order to make better use of it for the analysis of the performance of the national economy, a brief introduction of the input-output table is given in the following paragraphs.

Reflecting the sources of the input into, and the utilization of the output from production by various industries of the national economy, the input-output table constitutes an important part of the new national economic accounting system of China. It is used to reveal, in quantitative terms, the inter-related and mutually dependent economic and technological relations between industries. The input-output table consists of three parts, normally called Quadrant I, Quadrant II and Quadrant III. Quadrant I is composed of a matrix of intermediate products with identical names and order in rows and columns. The rows represent the intermediate input, while the columns represent intermediate uses. Figures in each cell has double meaning: vertically it represents the amount of product or service that the industry in question produces for each input industry as intermediate use, and horizontally it represents the volume of goods or services that the industry consumes in the production process. It is core of the input-output table that adequately reflects the inter-related and mutually dependent economic and technological relations between different industries of the national economy.

Quadrant II is the vertical extension of Quadrant I. It has the same row headings with Quadrant I, and its column headings consist of various components of final use such as final consumption, gross capital formation and net exports. This part of the input-output table describes the quantity and structure of goods and services produced by different industries that are allocated to final uses, representing the distribution and redistribution of the gross national product beyond the production process. Quadrant I and Quadrant II together represent the uses of goods and services produced by industries, i. e. the quantity of intermediate use and final use.

Quadrant III is the horizontal extension of Quadrant I. It has the same column headings with Quadrant I and its row headings consists of primary input such as depreciation of fixed capital, compensation of labour, net taxes of production and operating surplus. This part of the input-output table illustrates the composition of value-added (i. e. the primary input) of various industries, representing the primary distribution of the gross national product).

Quadrant I and Quadrant III together represent the source of input of industries in the production process and the value component of their products, i. e. the quantity of intermediate input and value-added. Inter-connected with each other, the 3 quadrants of the input-output table comprehensively and systematically reflect the relations (both the aggregate and the structure) between different industries from production to final use.

III. Flow of Fund Table

Similar to internationally accepted format, the flow of fund table of China constitutes a matrix of institutional sectors by transactions. Items of transactions are expressed as row headings representing forms of distribution and methods of financing. Institutional sectors are shown as column headings, grouped by the characteristics of the transactors. There are 5 groups of institutional sectors in the flow of fund table, namely, non-financial corporations, financial institutions, general governments, households, and the rest of the world. Under each sector there are 2 headings: source of fund and utilization of fund. The current flow of fund table is composed of two parts: the first part is the physical (real) transaction compiled by the National Accounts Department of the National Bureau of Statistics, and second part is the financial transactions compiled by the Survey and Statistics Department of the Peoples Bank of China.

The physical (real) transaction part of the table is compiled by disaggregating macroeconomic data. On the basis of the national accounts, statistics collected by the National Bureau of Statistics on various subject areas are used in conjunction with available statistics on public finance, banking, taxes, foreign exchanges and business administration, and with data from special surveys. The process involves tabulation, disaggregation, adjustment, verification and consolidation of data from different sources.

The financial transaction part of the table is compiled mainly using accounting data of banks and other financial institutions, supplemented by special surveys and estimation. Data used include accounting and business reports of financial institutions, statistics on credits and loans, profits and losses statements, profits distribution reports, statistics on the financial transactions with the rest of the world, statistics on the issue and transfer of securities, balance of payment statistics, statistics on the circulation of currencies, etc.

IV. Balance of Payment Table

The balance of payment table in this chapter was compiled by the Balance of Payment Department of the State Administration of Foreign Exchanges.

Efforts on establishing Chinas balance of payment statistics started in 1980. The concepts, principles and framework of statistics on balance of payment were mainly taken from the 4th edition of the Manual on Balance of Payment by the International Monetary Fund (IMF), with certain modifications that took into consideration of the planned economic system prevailing at that time in China. Data required for the compilation of balance of payment statistics mainly came from statistics of different ministries concerned, without taking special surveys. In existence for 17 years, this system of could reflect the basic situation of balance of payment in China. However, shortcomings of the system became more and more evident along with the development of the economic system in China. For instance, the old system is inconsistent with the criteria of the new balance of payment statistics as are set in the 5th edition of the Manual on Balance of Payment, and it maintained some characters of a planned economy, which could not meet the requirements of the current socialist market economic system. In addition, the gap in the sources of data has led to large errors and omission of the figures in the balance of payment statistics. Therefore, the State Administration of Foreign Exchanges initiated important changes to the old system of balance of payment statistics. Firstly, new data collection approach was introduced featuring the reporting of transactors. This new approach, embodied in the Reporting System for Balance of Payment Statistics which became effective from 1 January 1996, integrates direct reporting with indirect reporting, and case-by-case reporting with regular reporting. Secondly, the methodology and standards in the 5th edition of the Manual on Balance of Payment were fully adopted in compiling balance of payment statistics since 1997.