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 value added, income, and products respectively. The form of value added refers to the total value of all products and services produced by all resident units during a certain period of time minus total value of intimidate input of materials and services of the nature of non-fixed assets or the summation of the value added of all resident units; the form of income includes all the income created by all resident units and distributed primarily to all resident and non-resident units; the form of products refers to all final goods and services of final use by all resident units plus the value of net exports of goods and services. In the practice of national accounting, gross domestic product is calculated with three approaches, i.e. product approach, income approach and expenditure approach, which reflect gross domestic product and its composition from different aspects.

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 form country to country. In China economic activities are categorized into the following three strata of industry:

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.

GDP by Income Approach   refers to the method of measuring the final results of production activities of a country (region) during a given period from the income items produced by all resident units. It includes laborers’ remuneration, net taxes on production, depreciation of fixed assets and operating surplus, i.e.:

GDP by income approach =compensation of employee + net taxes on production + depreciation of fixed assets + operating surplus

(I)Compensation of Employee 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.

 (II)Net Taxes on Production refers to the difference of the taxes on production minus the 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 some factors of production, such as fixed assets, land and labor force, used in the production activities they are engaged in. In contrast to the taxes on production, the subsidies on production is the unilateral transfer of part of the government's revenue to the production units and is therefore treated as the negative taxes on production, They include subsidies on the loss due to implementation of government policies, price subsidies, etc. 

(III)Depreciation of Fixed Assets refers to the depreciation of fixed assets drawn in accordance with the stipulated depreciation rate for the purpose of compensating the wear loss of the fixed assets or the depreciation of fixed assets calculated in a fictitious way 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 and calculated as part of the cost. In the units, which do not draw the depreciation expenses, such as government agencies, institutions not managed as enterprises as well as the houses of residents, the depreciation of fixed assets is the fictitious 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, there is no actual condition to re-evaluate all the fixed assets in China. Therefore, the above-mentioned methods are temporarily adopted at present.

(IV)Operating Surplus refers to the balance of the value added created by the resident units deducting the laborers' remuneration, net taxes on production ant the depreciation of fixed assets. It is equivalent to the business profit of the enterprises plus subsidies on 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 use. It includes final consumption expenditure, total capital formation and net export of goods and services, i.e.:

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 on final consumption of goods and services from domestic economic territory and abroad to meet the requirements of material, cultural and spiritual life. It excludes 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.

 (I) 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 households consumption expenditure also includes expenditure on goods and services obtained by the households in other ways, i.e. the so-called fictitious consumption expenditure, which includes the following types: (a) the goods and services provided to the households by the employer in the form of payment in kind and transfer in kind; (b) the goods and services produced and consumed by the households themselves, in which the services refer only to the owner-occupied housing and domestic and individual services provided by the paid household workers; (c) financial intermediate services provided by the financial institutions; (d) the insurance services provided by insurance companies.

 (II) Government consumption Expenditure refers to the expenditure on the consumption of the public services provided by the government to the whole society and the net expenditure on the goods and services provided by the government to the households for free charge or at lower prices. The former equals to the output value of the government services minus the value of operating in come obtained by the government departments. The latter equals to the market value of the goods and services provided by the government to the households minus the value received by the government from the households.

Gross Capital Formation   refers to the net amount of the fixed assets and stock acquired minus those disposed, including the gross fixed assets formation and changes in inventories.

 (I) Gross fixed capital formation refer to the value of fixed assets purchased, transferred in by the resident units and those produced and used by themselves deducting the value of fixed assets sold and transferred out. It can by classified into total tangible assets formation and total intangible assets formation. The total tangible assets formation include the value of the construction projects, installation projects completed and the equipment, apparatus and instruments purchased as well as the value of land improved, the value of draught animals, breeding stock, milk, wool and recreational animals and the newly increased economic forest in a certain period. The total intangible assets formation includes the prospecting of minerals, the acquisition of computer software, the originals of recreational works and works of literature and arts minus the disposal of them.

 (II) 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 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 difference of the exports of goods and services minus the imports of goods and services. The imports include the value of various goods and services sold or gratuitously transferred by the resident units to the non-resident units. The imports include the value of various goods and services purchased or gratuitously acquired by the resident units from the non-resident units. Because the provision of services and the use of them happen simultaneously, the import and export of services by the 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 export and import of goods are calculated at FOB.

Share of the contributions of the industry   refers to the proportion of the increment of the value-added of each industry to the increase of GDP.

Contribution of the industry   contribution is the driven percentage points to GDP growth. Contribution of the industry is the driven percentage points of each industry to GDP growth. Its calculation formula is:

contribution ( %) = share of contribution (%) × GDP growth rate (%)