Explanatory Notes on Main Statistical Indicators
Gross
Domestic Product refers to the final products at market prices produced by all residents in
a country (or a region) during a certain period of time.
Gross domestic product is expressed in three
different forms, i.e. value, income, and products respectively.
GDP in its value form 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 of non-fixed assets and
services; in other term, it is the sum of the value-added of all resident
units.
GDP in the form of income includes the
income created by all resident units and distributed to resident and
non-resident units.
GDP in the form of products refers to the
value of all goods and services for final consumption by all resident units
minus the net exports of goods and services during a given period of time.
In the practice of national accounting,
gross domestic product is calculated with three approaches, i.e. production
approach, income approach and expenditure approach, which reflect gross domestic
product and its composition from different aspects.
Production
Approach focuses on the total value of goods and services produced in production
activities. GDP by Production Approach equals the value of total output minus
that of input consumed in production process.
GDP by Production Approach = gross output-intermediate input
Gross
Output refers to the total value of goods and service produced by all residents
in a given period,including newly-produced goods and
service, and intermediate input.
Intermediate
Input refers to non-fixed assets and paid service consumed during production
process when goods and service are produced. Intermediate input is also called
intermediate consumption.
Value-added refers to the value of newly-produced goods and service and that of
consumed fixed assets. By production approach, it equals gross output minus
intermediate input.
Income
Approach (also known as distribution approach): refers to the method measuring
the final results of production activities o from the perspective of income
made by all residents. GDP of income approach includes laborers’ remuneration,net taxed on
production, depreciation of fixed assets and operating surplus.
GDP by income approach = laborers’
remuneration+ net taxed on production+depreciation of
fixed assets+operating surplus.
The sum of value added made by different
industries is GDP.
Laborers’
Remuneration refers to the whole payment of various forms earned by the laborers’ from
the productive activities they are engaged in. It includes wages, bonuses and
allowances the laborers’ earned in monetary form and in kind. It also includes
the free medical services provided to the laborers’ and the medicine expenses,
traffic subsidies and social insurance, housing fund paid by the employers.
Net
Taxes on Production refers to the difference of the taxes on production minus the subsidies on
production.
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 labor
force in the production activities they are engaged in.
In contrast to the taxes on production, the
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 of a given period, 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. 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.
Operating
Surplus refers to the balance of the value added created by the resident units
deducting the laborers’ remuneration, net taxes on production and 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.
Final
Consumption Expenditure refers to the total expenditure on goods and services in a given period,
which means the total expenditure of resident units for purchases 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.
Household
consumption refers to the consumption expenditure made by household on goods and
services. It is calculated at market price which is the purchasers’price.
Purchasers’price means the money the purchasers paid
for goods, including transportation fees and operating fees.
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 imputed
consumption expenditure, which includes the following: (a) the goods and
services provided to the households by the employer 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 only to the owner-occupied
housing and domestic and individual services provided by the paid household
workers; (c) financial intermediate services provided by financial
institutions; (d) insurance services provided by insurance companies.
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 free of charge
or at low 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 low prices to the households
minus the value received by the government from the households.
Total
Capital Formation refers to the fixed assets acquired minus those disposed of and the net
value of inventory, including the total fixed capital formation and the
increase in inventory.
Total
Fixed Capital Formation refers to the value of fixed assets acquired minus those disposed of
during a given period. Fixed assets are the assets produced through production
activities with specified unit value which could be used for over one year,
excluding natural assets. Total fixed capital formation can be categorized into
total tangible capital formation and total intangible capital formation. The
total tangible capital 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, animals for milk, wool and for recreational
purpose, and the newly increased forest with economic value during a given
period. The total intangible capital formation includes the prospecting of
minerals, the acquisition of computer software, artisticworks
artistic minus the disposal of them.
Increase
in Inventory refers to the market value of the change in inventory of resident units
during a given period, i.e. the difference of value between the beginning and
the end of the period minus the current gains due to the change in prices. The
increase in inventory can be positive or negative. A positive value indicates
the increase in inventory while a negative value indicates the decrease in
stock. The inventory includes the raw materials, fuels and reserve materials
purchased by the production units as well as the inventory of finished
products, semi-finished products, work-in-progress, etc.
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 acquisition 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.
Three Industries: Classification of economic activities
into three branches of industries is based on the development of production.
Primary industry refers to the production activities that obtain products from
nature. Secondary industry refers to the production activities that process
primary goods. Tertiary industry refers to the production activities that
provide primary and secondary industries with services. Classification of
economic activities into three branches of industries is a common practice in
the world, although the grouping varies to some extent from country to country.
According to the new Industrial Classification of National Economy (GB/T
4754-2002), economic activities are categorized into following industries:
Primary industry refers to agriculture, forestry,
animal husbandry and fishery.
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 primary or secondary industry.According
to the economic condition in China, tertiary industry includes Transport,
Storage and Post, Information Transmission, Computer Services and Software,
Wholesale and Retail Trades, Hotels and Catering Services, Financial
Intermediation, Real Estate, Leasing and Business Services, Scientific
Research, Technical Services and Geologic Prospecting,Management
of Water Conservancy, Environment and Public Facilities, Services to Households
and Other Services,Education, Health, Social Security
and Social Welfare, Culture, Sports and Entertainment, Public Management and
Social Organizations, and International Organizations.
Current
Price refers to the actual price during the reporting period, such as Ex-factory
Price of Industrial Products, purchasing price of agricultural produces and
retail price. Some indicators calculatedat current price are volume indicators in the value form, such as total
value of output of industrial and agricultural industries and GDP, etc. Data
calculated at current price are useful when it comes to evaluating the economic
development and analyzing different aspects of economy, such as production,
circulation, distribution and consumption.
When the different indicators calculated at
current price are compared, it is in evitable that price changes will affect
the comparison. Therefore, the change in volume cannot be showed. In order to
eliminate the effect of price and reflect economic development, growth rate is
calculated at current price.
Constant
Price refers to the price without the effect of price change. By using constant
price, total amount indices of different periods can be compared. There are two
methods in which total amount indices are obtained, one using current price of
some year to multiply the physical volume of certain products and the other
using price index.