Brief Introduction

I. Main Contents

Data on price indices in this chapter show the trends and rates of changes in the prices of production, distribution, consumption and investment, including mainly consumer price indices, retail price indices, price indices of agricultural means of production, producer price indices for farm products, producer price indices for industrial products, purchasing price indices for industrial producers, price indices for investment in fixed assets, and price indices for imports and exports.

II. Sources of Data

Compilation of statistics on price indices is organized by the Department of Urban Social and Economic Surveys and the Department of Rural Social and Economic Surveys of NBS. The social and economic survey organizations of 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 agencies at higher levels. Statistics on price for imports and exports are provided by the General Administration of Customs.

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 sample surveys. Areas distributed in different economic regions are selected as the sample areas and representative goods or services are selected as the sample commodities. Regular surveys are conducted to collect data on their market prices. Price statistics are estimated on the basis of the results from the samples. At present, 500 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 outlets: 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, shopping malls (stores), supermarkets, farmers’ markets, service outlets and Internet e-commerce with large operation scale and various commodity types are selected as outlets for the survey.

(2) The selection of representative commodities and their specifications or varieties: The representative specifications are to choose those goods or services that have large consumption and representative price changes. The representative specifications or varieties are determined based on the consumption expenditure account data of urban and rural residents and data on the retail sales of commodities in line with related instructions. The principles for selection are: (a) The commodities are closely related to social production and people’s living conditions; (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, and the correlation of price changes is low.

At present, data are collected under 262 basic headings in 8 categories in the consumer price surveys. For the retail price surveys, data are collected under 197 basic headings in 16 categories.

(3) Method of data collection: Through hand-held data capturing device, direct investigation is conducted by the method of fixed data collector, fixed outlet and fixed timing, or the selected respondents assist in filling in the forms. On the premise of ensuring accurate prices and with the approval by the NBS, local governments can collect prices of specific goods and services from the Internet through announcements and other documents issued by relevant government departments, as well as publicly published fee-collecting information of some enterprises and units, and electronic data of the units under investigation.

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

IV. Producer Price Indices for Industrial Products

Producer prices for industrial products refer to the ex-factory price of manufactured goods when they are first sold. The survey covers both key industrial enterprises with annual revenue from the primary activities at and above 20 million yuan, and typical industrial enterprises with annual revenue from the primary activities below 20 million yuan.

(1) Principles for selecting the representative enterprises: (a) Enterprises to be covered in the survey are selected by industrial sectors; (b) All (or a majority of) large-scaled enterprises should be selected; (c) Enterprises selected should be those with normal and stable production.

(2) Principle for the selection of representative products:

(a) Products are selected by industrial sectors; (b) The selected products should have great impact on the national economy and people’s living conditions; (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 representative to the localities.

The survey catalog of Producer Prices for Industrial Products includes over 20,000 products under 1,638 basic headings.

(3) Method of data collection: The method of reporting forms by enterprises is adopted. There are more than 50,000 industrial enterprises which should report the price data every month.

(4) Determination of the weights: In statistics of producer price indices for industrial products, the weight of small groups and above of industrial classification comes from the output value of industrial sales by sector in industrial statistics; the weight of basic headings of categories comes from an independent product weight survey of industrial enterprises.

V. Price Indices for 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, typical units and non-traditional data substitution. The suevey investigates the prices of all kinds of investment products and charging items involved in the fixed assets investment of the whole society.  The survey content includes the prices of construction and installation, the purchasing price of equipment, tools and instruments, and the prices of others investments.

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

(1) The principle of selecting enterprises: the enterprises to be covered must have strong representativeness of investment economic activities. First, the amount of investment economic activities expressed by amount is large, i.e., those enterprises with large investment, large amount of purchase of representative products, or enterprises that consume more representative products should be selected. Second, there are many types of investment economic activities.

(2) Method of price survey: An enterprises reporting system is used.

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

VI. Price Index for Farm Products

Price index for farm products refers to the actual price per unit through directly selling their products by producers of farm products. The survey program of price index for farm products is a combined use of sampling survey and survey of typical units’. It covers main farm products produced and sold by the units surveyed. Representative farm products covered about 90% of small groups of all major groups in 4 branches of agriculture, forestry, animal husbandry and fishery. The products are generally with large production and sales, having great impact on the national economy and people’s living conditions, with strong stability, with promising to new products and with local characters. Representative products are in the sample for 5 years. The survey is conducted quarterly.

VII. Price Indices for Imports and Exports

Price indices for imports and exports reflect trend and degree of price changes in import and export of commodity over a given period of time. They are compiled with the unit value method on the basis of statistics of imports and exports of goods of the China Customs. With Renminbi as the unit of messurement, import price index is computed at CIF prices and export price index is computed at FOB prices.