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 perspectives, namely value, income, and products respectively. GDP in
its value perspective 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 words,
it is the sum of the value-added of all resident units. GDP from the
perspective of income includes the primary income created by all resident units
and distributed to resident and non-resident units. GDP from the perspective of
products refers to the value of all goods and services for final demand by all
resident units minus the imports of goods and services during a given period of
time. In the practice of national accounting, gross domestic product is
calculated from three approaches, namely production approach, income approach
and expenditure approach, which reflect gross domestic product and its
composition from different angles.
For
a region, it is called as Gross Regional Product(GRP)
or regional GDP.
Gross National Income (GNI) also known as Gross National
Product, refers to the final result of the primary distribution of the income
created by all the resident units of a country (or a region) during a certain
period of time. The value-added created by the resident units of a country
engaged in production activities is distributed, during the primary
distribution, mainly to the resident units of that country, while part of it is
distributed to the non-resident units in the form of production tax and import
duties (minus subsidies to production and import), compensation of employees
and property income. In the meantime, a part of the value-added created abroad
is distributed to the resident units of the country in the form of production
tax and import duties (minus subsidies to production and import), compensation
of employees and property income. The concept of Gross National Income is thus
developed, which equals to Gross Domestic Product plus the net factor income
from abroad. Unlike GDP which is a concept of production, GNP is a concept of
income.
Three Strata of Industry
Classification of economic activities into three
strata of industry is a common practice in the world, although the grouping
varies to some extent from country to country. In
Primary
industry refers to agriculture, forestry, animal husbandry and fishery and
services in support of these industries.
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 the primary or
secondary industries.
Compensation of Employees refers to the total payment of
various forms to employees for the productive activities they are engaged in.
It includes wages, bonuses and allowances, which the employees earn in cash or
in kind. It also includes the free medical services provided to the employees
and the medicine expenses, transport subsidies and social insurance, and
housing fund paid by the employers. As regards the individual economy, since
compensation of employees is not easily distinguishable from the operating
surplus, both parts are treated as compensation of employees.
Net Taxes on Production refers to taxes on production
less 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 in the production activities they are
engaged in. In contrast to taxes on production, 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 in a given period, drawn in accordance with the stipulated
depreciation rate for the purpose of compensating the wear-and-tear loss of the
fixed assets or the depreciation of fixed assets imputed 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, currently the conditions in
Operating Surplus refers to the balance of the value added
created by the resident units after 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 to
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 uses. It includes final
consumption expenditure, gross capital formation and net export of goods and
services. The formula for computation is.:
GDP
by expenditure approach = final consumption expenditure + gross capital
formation + net export of goods and services
Final Consumption Expenditure refers to the total expenditure
of resident units for purchases of goods and services from both the domestic
economic territory and abroad to meet the needs of material, cultural and
spiritual life. It does not include the expenditure of non-resident units on
consumption in the economic territory of the country. The final consumption expenditure
is broken down into household consumption expenditure and government
consumption expenditure.
Household Consumption Expenditure 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 household consumption expenditure 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 households by employers 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
to the owner-occupied housing and services offered by payed
family employees; (c) financial intermediate services provided by financial
institution.
Government Consumption Expenditure refers to the consumption
expenditure spent for the provision of
public services provided by the government to the whole country and the
net expenditure on the goods and services provided by the government to
households free of charge or at reduced 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 reduced
prices to the households minus the value received by the government from the
households.
Gross Capital Formation refers to the fixed assets
acquired less disposals and the net value of inventory, thus including gross
fixed capital formation and changes in inventories.
Gross Fixed Capital Formation refers to the value of
acquisitions less those disposals of fixed assets during a given period. Fixed
assets are the assets produced through production activities with unit value
above a specified amount and which could be used for over one year. Natural
assets are not included.Gross fixed capital formation
can be categorized into total tangible fixed capital formation and total
intangible fixed capital formation. Total tangible fixed capital formation
includes the value of the construction projects and installation projects
completed and the equipment, apparatus and instruments purchased (less those
disposed) as well as the value of land improved, the value of draught animals,
breeding stock and animals for milk, for wool and for recreational purposes and
the newly increased forest with economic value. Total intangible fixed capital
formation includes the prospecting of minerals and the acquisition of computer
software minus the disposal of them.
Changes in Inventories refers to the market value of
the change in the physical volume of inventory of resident units during a given
period, i.e. the difference between the values at the beginning and at the end
of the period minus the gains due to the change in prices. The changes in
inventories can have a positive or a negative value. A positive value indicates
an increase in inventory while a negative value indicates a decrease in
inventory. The inventory includes raw materials, fuels and reserve materials
purchased by the production units as well as the inventory of finished products,
semi-finished products and work-in-progress.
Net Export of Goods and Services refers to the exports of goods
and services subtracting the imports of goods and services. Exports include the value of various
goods and services sold or gratuitously transferred by resident units to
non-resident units. Imports include the value of various goods and services
purchased or gratuitously acquired resident units from non-resident units.
Because the provision of services and the use of them happen simultaneously,
the acquisition of services by 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 exports and imports 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
table of direct input coefficients, or the direct input coefficients 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 table of
total input coefficients, or total input coefficients 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 to groups of
institutional units that are homogenous in nature and have been grouped
together. The following 4 institutional sectors are identified in the flow of
funds accounts: non-financial corporations, financial institutions, general
government 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 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 intermediary services
or auxiliary financial activities that are closely related with financial
intermediary services, mainly covering the Central Bank, commercial banks,
policy banks, non-banking credit institutions and insurance companies. All
financial institutions together make up the sector of financial institutions.
General Government and the Sector of
General Governments General government 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 for
their common disposal, and share their housing, food and other consumer goods
and services. All households together make up the sector of households.
Non-resident Units and the Rest of
the World Non-resident units refer to
units that are of a non-resident nature. All non-resident units that have
transactions with resident units together make up the rest of the world.
Total Income from Primary Distribution Primary distribution refers to
the distribution of net results from production activities among the owners of
factors of production and the governments.The net
results from production activities is the value-added. Factors of production
include labour force, land and capital. 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
capital: owners of loan capital receive income from interests. Share holders
receive dividends or non-distributed profits. Government either obtains
production tax or pays subsidies in participating directly or indirectly in the
production processes. Results of primary distribution generate the total income
from 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
in the form 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. They include income tax, payment to social
securities, social allowances and other current transfers.
Total Disposable Income Total income from 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 total disposable income
subtracting 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 of non-financial investment capital, and is a
transaction that seeks no return from the recipient. Capital transfer differs
from current transfer in 2 aspects: 1) The purpose of
the capital transfer is investment rather than consumption. 2) Capital transfer
features the transfer of the ownership of assets other than inventory and cash,
and 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 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 an agreed time frame. They include demand deposit,
time deposit, savings deposit, fiscal 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 an agreed time frame. They
include short-term loan, medium- and long-term loan, fiscal loan, foreign
exchange loan and other loans.
Securities (excluding shares) refer to written certificates
representing creditors’ rights as purchased by bond holders or as acquired 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, and so on.
Shares and Other Holding Rights refer to the rights of
stockholders and direct investors on the net assets of corporations they have
invested in. Shares refer to negotiable securities on creditor’s rights, issued
by share companies certifying the investment by stockholders and their rights
and duties in accordance with the amount of stocks that they hold. Other
holding rights refer to the direct investment by institutional units in other
units with currency capital or with assets, in forms other than shares and
negotiable securities on creditor’s rights, including such tangible assets such
as land, buildings, machines and equipment, inventory, resources, etc., and
such intangible assets as trade marks, patents, monopolies, rights on land use,
licenses, commercial reputation, etc.. Documents of proof of holding rights
usually include certificates on creditor’s right, certificates on investment or
on participation, etc.
Insurance Reserve Funds
consists of net equity of households in life insurance reserves and
in pension funds reserves, prepayments of insurance premiums, and reserves for
outstanding claims.
Settlement Fund refers to fund in float of
financial institutions for settlement.
Inter- financial Institutions Accounts refer to flow of capital
between financial institutions, consisting of nostro
& vostro accounts, inter-bank lending.
Required and Excessive Reserves refer to financial
institutions’ deposits with the People’s Bank of China.
Central Bank Lending refer to lending to financial
institutions by the People’s Bank of China
Current Account
includes goods, services, income 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 border 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 refer to services provided
between resident and non-resident units, including services on transportation,
tourism, communications, construction, insurance, finance, computer and
information, consultancy, advertising and publicity, as well as film, audio and
video services, royalty for patents, trademarks and other special rights, other
commercial services, and government services.
Income refers income from provision of factors of
production between resident and non-resident units, including compensation of labour 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, deposits and
other assets, provided by foreign countries to
Reserve Assets, Net Increase refers to the difference between
the end of the reference year and the end of the previous year, in gold reserve,
foreign exchange reserve, special drawing rights in the International Monetary
Fund, and the use of the Fund’s credits. An increase in reserve assets is
expressed in a negative figure and a decrease in the reserve assets is
expressed in a positive figure.