Chinas InputOutput Survey and Tabulation Method Comments 13th OECD NBS Workshop on National Accounts

1
Chinas Input-Output Survey and Tabulation
MethodComments13th OECD NBS Workshop on
National AccountsNovember 40- December 4,
2009Haikou, China

• Contact nadim.ahmad_at_oecd.org

2
General Observation

• IO and SU tables are extremely important
  components of the national accounts framework and
  on-going work and developments in China are
  welcomed and strongly encouraged.

3
Detailed Comments

• Paper describes a number of survey sources used
  to populate the output, intermediate consumption
  and value-added cells in the IO table.
• 52 questionnaires categorised by 3 types
• Census questionnaires
• Focused questionnaires
• Typical questionnaires

4
Detailed comments

• Census questionnaires
• Investment composition of fixed assets30m Yuan
• Composition of manufacturing costs of the
  large-sized industrial enterprises above
  designated size 5m Yuan
• Gross industrial output and sales volume and
  output of major industrial products
• Investigation information of costs and expenses
  of industrial enterprises

5
Detailed comments

• Points of clarification
• Not clear which enterprises are included all?
  or just manufacturing?
• How are small and medium enterprises (lt5 m Y)
  captured?
• What use is made of the business register? And
  how are survey results grossed-up to the entire
  population? What percentage of enterprises (as a
  per cent of value-added or output are surveyed?)
• How is the business register updated?

6
Detailed comments

• Focused questionnaires basic units of medium
  and small sized industrial enterprises above
  designated size of construction and service
  enterprises
• Points of Clarification
• Are these questionnaires for the construction and
  service industries? Or are they questionnaires
  that target expenditures on these activities by
  small and medium enterprises?

7
Detailed comments

• Typical questionnaires compositions of
  transportation expenditures and travelling
  expenses etc
• Points of Clarification
• More detail required on these questionnaires?
  Its not entirely clear what they are and how
  they are used.

8
Commodity by commodity

• Tables are produced on a C by C basis.
• Questions
• Given the information available to produce C by C
  tables it should be possible to produce
  corresponding SU tables. Is the reason they are
  not produced because it is assumed that IO
  commodity coefficients (cost structure) can be
  used to estimated the intermediate consumption
  and value-added of enterprises not directly
  surveyed (but which have been able to provide
  estimates of output)?
• If this is the case, it is important to better
  understand at what level of industry
  classification it is applied as it presupposes
  strong homogeneity in production processes
  which is questionable when comparing large and
  small enterprises.
• How is value-added allocated when secondary
  products are by-products?

9
General questions

• Are estimates of own-account production made?
  (software, construction etc)
• How is the informal economy (and unincorporated
  enterprises) measured?
• How are estimates of margins on products derived?
  
• How detailed are the tables (commodity
  classification)?

10
General questions

• Are estimates of own-account production made?
  (software, construction etc)
• How is the informal economy (and unincorporated
  enterprises) measured?
• How are estimates of margins on products derived?
  
• How detailed are the tables (commodity
  classification)?

11
Responding to NBS questions

• Which level of the 5 levels of CPC should be used
  in commodity balancing for compiling accounts of
  goods and services and for balancing of further
  supply and use? Could we say the 4th or the 5th
  level of CPC must be adopted?
• The SNA is not prescriptive in this regard. It
  depends entirely on the information available in
  a country. The general principle is that the
  compilation of tables (especially those that
  require assumptions based on observed
  coefficients in surveyed enterprises) should be
  as detailed as possible .The publication level of
  tables however need not (and rarely does) follow
  the compilation level. Generally these are less
  detailed depending on the quality of balancing,
  microdata and confidentiality constraints.

12
Responding to NBS questions

• In US, information from economic census is very
  rich, with detailed output data of goods and
  services, and the complete output data by
  detailed commodity can be gathered. However, for
  countries where there is not economic census yet,
  or just part of establishments has been
  investigated, how are the complete output data by
  commodity compiled, or how are the complete
  output data by commodity imputed?
• A business register is a pre-requisite. Most
  business registers will also provide an
  indication of size either via turnover or
  employment. And this information can be used to
  stratify enterprises into different bands. But it
  is essential that at least some enterprises are
  surveyed in each of these bands.
  Tax/administrative records provide an additional
  useful source for compiling a BR.

13
Responding to NBS questions

• In addition, must the objects of investigation be
  establishments? Could the enterprises be objects
  of investigation, while the industry to which the
  enterprise is attached is determined by nature of
  the enterprises central product? In other words,
  for better adopting the suggestions by SNA, what
  are the most essential requirements?
• The SNA still prefers establishments. However in
  practice there is an increasing tendency to
  collect information from enterprises (and this
  forms part of the 2008 SNA research agenda). Many
  EU countries for example already compile their
  tables using enterprise information which is
  useful for analytical applications such as
  productivity measurement, RD, innovation etc.

14
Responding to NBS questions

• How should auxiliary activities be captured? Are
  different questionnaires needed? How are
  auxiliary activities/expenditures allocated to
  commodities?
• Para 5.9 of the 1993 SNA defines ancillary
  activities. The costs of these activities must be
  allocated to using establishments/commodities and
  these can be allocated on the basis of
  (preferably) value-added or output shares.

15
Responding to NBS questions

• Wed like that you introduce us the main
  information used and compilation procedures in
  compiling supply and use tables through case
  studies of a developed country. How do you
  account the value added and its composition by
  industry when you compile the use table? Do you
  use investigation data of establishments to
  calculate the value added by production approach?
  Whether is the operating surplus derived by
  aggregate of value added minus the sum of the
  three components of compensation of employees,
  net taxes on production and depreciation of fixed
  assets? Or other calculation methods are adopted?
• See the previous US BEA presentation.

16
Responding to NBS questions

• When supply table and use table are compiled,
  which level of classification by industry and by
  commodity is used at least?
• This varies enormously by country. It is
  important to note too that the level of detail
  used for compilation is usually different to that
  used for publication. In the EU countries are
  currently required to provide tables at the NACE
  60 level but many produce tables at a more
  detailed level.

17
Responding to NBS questions

• How the basic price, the producers price and the
  purchasers price are reflected in input-output
  accounts? Which kinds of taxes are included in
  each of them?
• The 1993 SNA provides clear guidance here. In
  most countries IO tables are produced at basic
  prices and so will include other taxes and
  subsidies on production. Tables compiled at
  producers prices will additionally include any
  taxes/subsidies on products (e.g. VAT) that are
  not separately invoiced to the purchaser.
• Purchasers prices include all taxes/subsidies
  on products.
• Supply-use tables in theory should show
  value-added and output at basic prices and
  consumption at purchasers prices.

18
Responding to NBS questions

• How do you deal with value-added tax? Is the
  sales tax added to the output in basic price, and
  the purchase tax added to the intermediate input?
  Or is the value-added tax that should be turned
  over to the state added to the output in basic
  price, while without consideration of the
  purchase tax in the component of intermediate
  input?
• The answer depends on the valuation basis used
  for the tables. IO tables produced at basic
  prices should have a separate row for any VAT
  incurred by enterprises (which is rare for market
  enterprises but not for non-market and small
  enterprises). In other words for IO tables at
  basic prices output should not include VAT
  neither should any of the transactions between
  industries/commodities.

19
Inter-relationship between Chinas IO estimation,
production-based GDP and expenditure based
GDP13th OECD NBS Workshop on National
AccountsNovember 40- December 4, 2009Haikou,
China

• Contact nadim.ahmad_at_oecd.org

20
General Comments

• Recommended reading 8th Workshop on National
  Accounts
• 5.  Accounting frameworks for constant price
  measures- GDP Balancing in Constant and Current
  Prices, Mr. AHMAD Nadim, OECD
• gt Paper in English (PDF)gt Paper in
  Chinesegt PowerPoint presentation

21
General Comments

• Recommended reading 11th Workshop on National
  Accounts
• Supply-use tables techniques for consistent
  estimates of missing data - AHMAD, Nadim (OECD)
  - PPT doc. english