Brief Introduction

I. Main Contents

Data on price indices in this chapter show the changing trends and the change rates in the prices of production, trade, consumption and investment, including mainly consumer price indices, retail price indices, price indices of agricultural means of production, producers’ price indices of farm products, producers’ price indices of industrial products, purchasing price indices of raw materials, fuels and power, price indices of investment in fixed assets, and price indices of real estate.

II. Sources of Data

Compilation of statistics on price indices is organized by the Department of Urban Socio-economic Survey, NBS. The urban socio-economic survey organizations of the provinces, autonomous regions and municipalities directly under the Central Government and of the selected cities and counties collect data from the grassroots units in accordance with the scheme of price survey system stipulated by the NBS, tabulate them and report them to the higher agencies.

III. Consumer Price Indices and Retail Price Indices

Data for compilation of the consumer price indices and the retail price indices in China are collected through a combination of sample surveys and surveys of key units. Areas distributed in different economic regions are selected as the sample areas and representative commodities are selected as the sample commodities. Regular surveys are conducted to collect data on their market prices. Population parameters are inferred on the basis of the sample data. At present, 226 cities and counties have been selected for this purpose. Following are major steps in the process of calculation of the price indices:

(1) The selection of areas and survey points: Based on such principles as regional economic features and reasonable geographic distribution, representative sample areas for the national survey are selected which include large, medium and small cities and counties. When the sample areas have been selected, large-scale shops and markets (including fairs and service outlets) with wide variety of commodities are selected as survey points.

(2) The selection of representative commodities and their specifications or varieties: The representative commodities selected are those consumed in large quantity and representative in price changes. The representative specifications or varieties are determined according to the data on the retail sales of commodities and the consumption expenditure account data of the residents of 56,000 urban households and 68,000 rural households; and selection follows the related instructions. The principles for selection are: (a) The commodities are closely related to social production and people’s livelihood; (b) They are consumes (or sold) in large quantities (or large values); (c) The market supply is stable; (d) The changes of their prices are representative in trend; (e) There is great heterogeneity among the specifications or varieties selected.

At present, data are collected on some 600-700 specifications each month under 263 basic headings in 8 categories in the consumer price surveys. For the retail price surveys, data are collected on more than 500 specifications each month under 229 basic headings in 16 categories.

(3) Method of data collection: Enumerators are sent to the survey points to take the records of the prices. Nearly 10 thousand assistant enumerators are recruited to assist the survey work.

(4) Determination of the weights: The weights for calculation of the retail price indices are determined mainly according to the total retail sales of commodities. The weights for calculation of the consumer price indices are determined according to the composition of the consumption expenditures of some 120,000 urban and rural households.

IV. Producers’ Prices Indices of Industrial Products

Producers’ prices of industrial products refer to the ex-factory price of industrial products when they are first sold. The survey program is a combined use of the key units’ survey and typical units’ survey methods. Key units refer to all State-owned industrial enterprises and those non-State-owned industrial enterprises with annual sale revenue above 5 million yuan. Typical units refer to the non-State-owned industrial enterprises with annual sale revenue below 5 million yuan. 

(1) Principles for selecting the representative enterprises:

(a) Enterprises to be covered in the survey are selected by industrial sectors. In principle, every branch should have enterprises selected; (b) All (or a majority of) large-sized enterprises should be selected; (c) Enterprises selected should be those with normal and stable production; (d) Different types of ownership should be considered in selecting enterprises.

(2) Principle for the selection of representative products:

(a) The products are selected by industrial sectors; (b) The selected products should have great impact on the national economy and people’s livelihood; (c) The production of the products selected are relatively more stable; (d) The prospects of the products selected are promising; (e) The products selected are typical to the place in question..

The current List of Industrial Products for the survey includes over 4,000 products (including 9,500 specifications or varieties). The industrial sales value of the industries represented by these products accounts for more than 90 percent of total industrial sales value of the country.

(3) Method of data collection: The method of reports by enterprises is adopted. About 50,000 industrial enterprises reporting price data every month.

(4) Determination of the weights: The weights for calculation of the producers’ price indices of industrial products are determined according to the total sales value of industrial products. Data from the industrial census are used for the calculation. If industrial census data are not available for the reference year, industrial statistical data and statistical data from other agencies will be used to estimate the weights. The weights are replaced every five years.

V. Price Indices of Investment in Fixed Assets

Data on prices of investment in fixed assets are collected by a program involving the combined use of surveys on key units and surveys on typical units. The prices collected in the surveys of investment in fixed assets are the actual purchasing prices or settlement prices of entities of investment in fixed assets. The survey content includes the prices of main construction materials that constitute the architectural engineering entity in the year, such as steel, timber, cement, local construction materials (such as brick, tile, calcareous ashes, sand, stone, etc.), chemical materials (such as oil paint, etc.), the price of labor force as input (wages), prices for renting of building machinery and equipment, the purchasing price of equipment, tools and instruments and the prices of others investments.

The following principles should be followed in selecting the sample for the price survey of investment in fixed assets:

(1) Principles for selecting the survey points of construction and installation: (a) Sample units should have a good coverage; (b) The economic activity of investment should have strong representativeness; (c) Different economic types of ownership should be considered; (d) key projects should be selected; (e) Attention should be given to various sectors of the national economy and types of projects.

(2) Principles for selecting price survey points of other fees: The principles for selecting survey points of others fees is in general the same as that of construction and installation,, with special attention being paid to selecting projects with huge investment value. Since it is not easy to obtain the other fees, during the actual data gathering operations, survey on key construction owner units and building units is to conducted concurrently with survey on typical units( With information from Administration units)

(3) Method of price survey: A combination of enterprises reporting system and enumerator visits method.

(4) Determination of the weights: The weights for calculation of the price indices of investment in fixed assets are determined according to the average proportion of construction and installation, purchase of equipment, tools and instruments and other investments in the 3 preceding years.

VI. Price Indices for Real Estate

In the broad sense real estate refers to properties in terms of both buildings and land. Therefore, the price survey on real estate covers the following items:

1) Sale prices of houses. In terms of the types of houses sold at the market, sale prices of houses include the prices for commercialized houses and for second-hand houses.

2) Renting price of houses. Included in this category are prices for renting residential housing, office buildings, buildings for business or recreational purposes, buildings for industrial or storage purposes, and housing for other purposes.

3) Transaction prices of land. Included in this category are prices for the transaction of land used for residential housing, for industrial and storage purposes, for business or recreational purposes and for other uses.

4) Property management price. Included in this category are prices for residential housing, office buildings, buildings for business or recreational purposes, and buildings for industrial or storage purposes.

Survey on real estate prices employed a combination of survey of key units and survey of typical cases. Data are collected through reporting forms supplemented by interviews.

The survey on real estate prices at present is conducted in 70 large and medium-sized cities, with a sample of over 10,000 units.