International Cooperation in National Accounts

1
International Cooperation in National Accounts

• Xu Xianchun
• Director-General
• Department of National Accounts
• National Bureau of Statistics
• May 10-12, 2004

2
Contents Part IOverview
on international cooperation in recent 10 years
Part IIMain problems existing in Chinese
national accounts Part IIIOutlook for
further international cooperation
3
I. Overview on international cooperation in
recent 10 years (1)Cooperation with IMF
Based on preliminary statistics, 21
person-times (15 persons) from DNA (Dept. of
National Accounts) have been involved in the
training programs provided by IMF. The topics
cover national accounts, financial programming,
monetary statistics etc. Of which, 2 persons
finished their one-year study in the GRIPS, Japan
and obtained their MPP degree under the
sponsorship of IMF. Nine persons attended
training courses on national accounts held by IMF
in US, Singapore and Austria respectively. Nine
persons attended the Financial Programming and
Policy Courses co-sponsored by the Peoples Bank
of China and IMF. One person attended the
Monetary and Financial Statistics Courses
co-sponsored by the Peoples Bank of China and
IMF.
4
(2)Cooperation with OECD Cooperation with OECD
focuses in two aspects A. Mathodological
research on problematic key issues on
national accounts B. Research on cyclical
indicators
5
A. Mathodological research on problematic key
issues on national accounts The cooperation in
the field of mathodological research on
problematic key issues on national accounts is
conducted in the form of NBS-OECD workshops held
alternatively in Chinese inland cities and in
Paris. So far, seven workshops have been held
since 1996. Of which, the first(Sept.1996), the
third (Oct.1998), the fifth (Sept.2001), and the
seventh (Nov.2003) were held in Beijing, Chengdu
and Dalian respectively the second (Aug.1997),
the fourth (Oct.2000), and the sixth (May 2002)
were held in Paris. Currently, the preparation
for the eighth workshop (Dec.2004) which is going
to be held in Paris is in progress.
6
A. Mathodological research on problematic key
issues on national accounts
The topics of the workshops cover almost
all important issues in national accounts in
terms of the complexity or the weak accounting
performance, comprising the compilation methods
of the annual accounts, housing service
statistics, real estate accounting, other
services measurement, constant price measures,
capital stock estimation, assessment of the
quality of GDP, seasonal adjustment in quarterly
accounts, benchmarking quarterly accounts to
annual accounts, NOE accounting methods etc.
Under the sponsorship of OECD, the papers
presented are compiled and published by NBS
after each workshop in the title of Research of
Methodological Issues on National Accounts. So
far, the series has been numbered 7.
7
B. Research on cyclical indicators
Cyclical indicator research started in
1998, where the construction of national cyclical
indicators is the emphasis for the cooperation
of the first phase, and the construction of
regional cyclical indicators for the second.
Under the technical assistance of OECD expertise,
a Chinese-English bilingual book, Business Cycle
and Cyclical Indicators in China, was
co-published by NBS and OECD in March, 2001. The
second phase of cooperation is a further step of
the first one, where the possibility of the
construction of regional composite leading
indicators is explored. The outcome is another
Chinese-English bilingual book named Regional
Composite Leading Indicators for Shanghai, China
was co-printed in Apr. 2002. At present, OECDs
regional cooperation with China in this field has
been extended to Shaan Xi Province to help
choosing a set of scientific leading indicators.
8
(3)Cooperation with ADB
ADB provides technical assistance to NBS to
improve its measurement of service industries,
very relevant for a better national accounts, in
China. This project was initiated in 2003, which
plans to spend three years to help China to
achieve a scientific and systematic accounting
framework in services accounting based on a fully
understanding of current Chinese service
statistics practice and on the experiences
obtained from the trial estimates for some
regional pilot surveys.
9
(3)Cooperation with ADB

• Start-up meeting. A formal start-up meeting was
  held in Dec. 19, 2003, in which an in-depth
  discussion was performed and the ideas on the
  current statistical practice of services, the
  existing problems, and the improvement proposals
  were exchanged.
• (b) Seminars. The first seminar was held in
  Beijing on April 20-22, 2004 in accordance with
  the schedule.

10
(4)Cooperation with Canada
The cooperation between NBS and Statistics
Canada are conducted in three fields that are
renting measurement for household dwellings,
stock value of fixed capital, and quarterly
accounts. (a) measurement for household
dwellings Drawing experience on the estimation
method of Canada on household dwellings and
combining the specific situation of China, NBS
chose cost method to estimate the rents of
household dwellings for a period 1990-2000, which
includes the total expenditure during the
services comprising the cost of repair and
maintenance of dwellings (materials and wages),
the administration fees of dwellings charged by
housing administration agencies, the imputed
depreciation of household dwellings. Based on a
great amount of information collected in the
process of this project, the share of rents in
GDP has increased by 4.5-7.2 via the new method
from 1.1-2.2 via the old method. The average
increase over the considered period is about 3
percent. The level of rents is increased
considerably as well, take 2000 for instance, the
rents rises from 194. 46 billion Yuan to 444. 74
billion Yuan. This project was awarded the
second-class prize of 2nd NBS Research Outcomes
in Feb., 2004.
11
(4)Cooperation with Canada
(b) Measurement of the stock value of fixed
capital Under the technical assistance of
Statistics Canada, the capital stock measurement
project, DNA uses both perpetual inventory method
(PIM) and geometric depreciation function method
to calculate and re-adjust the net current price
value of the stocks of the state-owned fixed
capital of China (urban and rural
dwellings,machinery and equipments,
infrastructure construction, non-dwelling
buildings, and livestocks), and the corresponding
consumptions of the fixed assets (depreciation).
This project was awarded the first-class prize of
2nd NBS Research Outcomes in Feb., 2004.
12
(4)Cooperation with Canada
(c) Quarterly Accounts Two training
courses were given alternatively in Beijing and
Ottawa, where the participants are from NBS, some
regional statistical bureau and some related
ministries. The training courses are delivered by
experts in the form of presentation and
instructor-led lab concerning benchmarking
quarterly data and seasonal adjustment, using
software developed by Canada. In January 2004,
DNA benchmarked the quarterly data over 1992-2001
to annual estimates for the first time based on
the project method, and formally published the
results.
13
(5)Cooperation with Statistics Norway

• Under the technical assistance of experts from
  Norway, the Chinese task force for energy
  accounting in the Project of China-Norway
  Environmental Statistics and Analysis
  accomplished all scheduled targets through an
  effort of 4 years from 1998 to 2001.
• Energy accounts compilation
• A basic framework and tabulation form were
  established based on the existing statistics and
  available data. Energy account of China of 1987,
  1995, and 1997 are compiled.
• (b) Constructing CGE model of China for
  comprehensive environmental policy analysis and
  environmental forecast

14
II. Main problems in current Chinese national
accounts
(1)Problems of service-industry
measurement (2)Problems of quarterly
accounts (3)Problems of constant-price
estimation (4)Problems of classification
(5)The inconsistency between national
accounts and specific statistics in NBS
(6)The gap between national data and
regional data (7)Problems of
environmental accounting (8)The issue of
Non-Observed Economy
15
III. Outlook for further international
cooperation
DNA expects further technical assistance
from the international organizations or related
experienced countries in the follow aspects (1)
Improving service-industry measurement of
China Desirable technical assistance from
international organizations or experienced
countries are the techniques on design and
implementation of regular sample surveys and data
processing for service-industries. In addition,
DNA also needs recommendations on how to make
best use of the existing departmental records and
administration data.
16
III. Outlook for further international
cooperation

• (2)Improving quarterly accounts
• DNA expects international technical
  assistance in this field in the following two
  aspects
• For quarterly GDP accounting by production
  approach, how to improve service-industry
  measurement from both methodology and practice
  perspectiveFor quarterly GDP accounting by
  expenditure approach, how to improve the
  estimates of fixed capital formation, household
  consumption, change of inventory, and services
  exports (including regional inflows and outflows
  of goods and services)How to reduce the
  differences of estimation between quarterly GDP
  by production approach and that by expenditure
  approach.
• How to benchmark quarterly GDP more efficiently
  to annual GDP.

17
III. Outlook for further international
cooperation

• (3) Improving constant-price estimation in China
• The desired aspects of international
  cooperation are
• Methodology on compiling produce price indices
  (PPIs) for service industries.
• Methodology on compiling trade price indices
  (TPIs) for service industries.
• How to construct chain price indices for service
  industries.

18
III. Outlook for further international
cooperation

• (4) Improving the quality of regional GDP
  accounting
• The desired aspects of international
  cooperation are
• Construct a set of scientific and comprehensive
  indicators for national and regional GDP quality
  assessment.
• Develop techniques on reducing the gap between
  national GDP estimation and the sum of regional
  GDP estimation.

19
III. Outlook for further international
cooperation
(5) Improving environmental accounting in
China Due to the increasing importance and the
complexity of environmental accounting, the
existing outcomes of research and the experiences
of practice should be absorbed before the
compilation of the environmental accounts of
China can be started. Therefore, DNA expects
continuous support from international
organizations and related experienced countries
in this field.
20
III. An outlook for further international
cooperation
(6) Establishing framework of NOE accounting in
China In theory, NOE (Non-Observed Economy) is
necessary to be included in GDP accounting to
ensure a comprehensive, exhaustive, high quality
GDP, and to make GDP comparable internationally.
Therefore, DNA welcomes technical assistance on
establishing Chinese NOE accounting framework in
adapting the circumstances that the share of NOE
in Chinese GDP has been increasing over time.