Title: Accounting Method for Chinas Quarterly GDP by Expenditure Approach
1Accounting Method for Chinas Quarterly GDP by
Expenditure Approach
- QIU, Qiong
- Dept. of National Accounts, NBS
2I. Introduction
- 1. Starting in 2000
- 2. Accumulative accounting
- 3. 3 levels of classification
- 4. Base year year 2000, with a base year change
each 5 years - 5. Data sources statistical information,
accounting information
3I. Introduction
- 6. Accounting process
- 1) Initial accounting 15 days after each quarter
- 2) Initial check 45 days after each quarter
- 3) Final verification after the final
verification of the annual data by expenditure
4II. Accounting Method for Chinas Quarterly GDP
by Expenditure Approach in Current Prices
- Due to lack of fundamental information,
accounting for Chinas quarterly GDP by
expenditure in current prices is mainly
calculated based on the relevant indicators.
51. Household Consumption Expenditures
- 1) Initial accounting It is calculated from the
total retail sale of consumer goods. - First, we calculate the proportion that
the total retail sale of consumer goods is in the
household consumption expenditures of last year.
Then, we use the proportion to calculate the
quarterly household consumption expenditures.
61. Household Consumption Expenditures
- 2) Initial check Using the household survey
materials, we calculate the rural and the urban
data respectively. - The Rural Household Consumption Expenditures
- cash consumption expenditures of the current
quarter - the annual rural household consumption
expenditures of last year/the annual rural
household consumption expenditures in cash of
last year
71. Household Consumption Expenditures
- 2) Initial check
-
- The Urban Household Consumption Expenditures
- urban household consumption expenditures from
the household surveythe annual urban household
consumption expenditures meeting the requirements
of accounting of last year/the annual urban
household consumption expenditures from the
household survey of last year
82. Government Consumption Expenditures
- Quarterly government consumption expenditure is
calculated according to the quarterly expenditure
data of financial budget. - 1) The day-to-day professional expenditure
- the administrative and the institutional
expenditure concerned of financial budget - - the expenditure transferred
- - the irregular expenditure(e.g. capital
construction expenditure, etc. )
92. Government Consumption Expenditures
- 2) According to the proportion that the
day-to-day professional expenditure of the
budget is in the government consumption
expenditures of the same period of last year, we
calculate the quarterly government consumption
expenditures of this year. - Due to restriction of information available, no
initial check.
103. Gross Fixed Capital Formation
- Gross fixed capital formation
- total investment in fixed assets in the whole
country - investment in fixed assets less than 0.5 million
yuan - increased fixed assets of the trial-produce of
new products - value added in selling the commercial house
- increment of intangible fixed assets
- -value for purchasing old buildings and old
equipments - -rate for land requisition, land purchasing and
- the related migration compensation
114. Increase in Inventory
- Quarterly increase in inventory of the initial
accounting and of the initial check - increase in inventory of industry
- increase in inventory of wholesale and retail
trade - changes of the industrial finished products in
stock - changes of the commodities of wholesale and
retail trade in stock
124. Increase in Inventory
- Increase in inventory of industry
- increase in inventory of industrial enterprises
above designated size /p - pvalue added of industrial enterprises above
designated size/gross value added of all
industrial enterprises
134. Increase in Inventory
- Increase in inventory of wholesale and retail
trade - increase in inventory of enterprises above
designated size in wholesale and retail trade/r - rtotal value of sales from commodity above the
designated size/gross value of sales from
commodity by all the wholesale and retail trade
145. Net Exports
- For calculating the quarterly net exports of the
initial accounting and of the initial check, we
use the statistical data from the Customs,
together with the data concerned from Balance of
Payments of the same quarter of last year. The
step is as follows - First, according to data of the same
period of last year, we calculate the exchange
coefficients between the data of commodities
exports and imports from the Customs statistics
and that of goods exports and imports from the
Balance of Payments.
155. Net Exports
- Secondly, using the exchange coefficients from
Step 1, we convert the data of goods exports and
goods imports from the Customs statistics
calculated in RMB into that identical with those
from Balance of Payments, thus we get the gross
exported and the gross imported of goods and the
net exports of goods meeting the requirements of
Balance of Payments.
165. Net Exports
- Thirdly, we determine the proportion of goods
exported or imported in the export of goods and
services or in the import of goods and services
during the accounting period. According to the
changing trend of the proportion of goods
exported or imported in the export of goods and
services or in the import of goods and services
in each quarter of last year, and the changing
conditions of this proportion of each quarter in
current year, we make adjustments for the
proportion of the same period in last year, and
the adjusted is used as the proportion for the
accounting period.
175. Net Exports
- Fourthly, using the proportion of goods exported
in the export of goods and services and that of
goods imported in the import of goods and
services, we calculate the export volume and the
import volume of goods and services respectively,
and get the net exports of goods and services. - For the final verification of quarterly net
exports, we directly adopt the data of imports
and exports from Balance of Payments.
186. The Final Verification
- We do benchmarking adjustments to the annual
final verification data and get the final
verification data of Chinas quarterly GDP by
expenditure approach. - Taking the year of 2005 as an
example, we make benchmarking adjustments for the
quarterly data of 2005 according to composition
of the annual GDP by expenditure approach in
2005, i.e. we distribute annual data of the final
verification to each quarter according to the
proportions the quarterly (accumulated) values
of indicators are in the annual data of 2005
before the final verification. In mathematical
terms, there is
196. The Final Verification
- Xq,05 refers to the absolute magnitude of the
estimated value in Quarter q in 2005 after the
adjustment. - Iq,05 refers to the absolute magnitude in
Quarter q in 2005 before the adjustment. - A05 refers to the absolute magnitude of the
annual data of the final verification in 2005. - Letter qquarter 1, quarter 1 to 2, quarter 1to
3.
20III. Accounting Method for Chinas Quarterly GDP
by Expenditure Approach in Constant Prices
- For quarterly GDP by expenditure approach in
constant prices, we all adopt the flop-out
method, deflating components of the quarterly GDP
by expenditure approach in current prices using
the corresponding price indices respectively.
211. Household Consumption Expenditures in
Constant Prices
- Data of the initial accounting and of the initial
check of household consumption expenditures
include those of the rural household consumption
expenditures and those of the urban household
consumption expenditures. We calculate the urban
and the rural household consumption expenditures
in constant prices according to the urban and the
rural household consumption price indices
respectively, using the flop-out method.
222.Government Consumption Expenditures in Constant
Prices
- First, using the proportion that the day-to-day
professional expenditures and the CFC is in the
annual government consumption expenditures of
last year as the weight, we conduct weighted
average work for the household consumption price
indices and the investment price indices of the
fixed assets, so as to get the government
consumption price index. - Then, we get the government consumption
expenditures in constant prices from the
government consumption expenditures in current
prices divided by the government consumption
price index.
233. Fixed Capital Formation in Constant Prices
- For the initial accounting of fixed capital
formation in constant prices, we use the
investment price index of fixed assets to deflate
the gross fixed capital formation. - For the initial check of fixed capital formation
in constant prices, we use different price
indices to deflate the corresponding items
respectively. The concrete situation is as
follows
243. Fixed Capital Formation in Constant Prices
- For total investment in fixed assets in the whole
country, investment in fixed assets below 0.5
million yuan, fixed assets increased by the trial
manufacture of the new products and formed by the
prospecting of minerals, we use the price index
of investment in fixed assets to deflate them.
For the value added from sales of commercial
houses, we use the sale price index of commercial
houses. For the value of computer software, we
deflate it by the price index of household
services. For value of the purchased old
equipment, we use the purchasing price index of
equipment, tools and instruments. For value of
purchasing old buildings, land and the other
rates, we use the price index of the other rates.
254. Increase in Inventory in Constant Prices
- For increase in industrial inventory, we use the
ex-factory price index of industrial products to
deflate it. - For increase in inventory of wholesale and retail
trade, we use the retail price index.
265. Net Exports in Constant Prices
- Gross imports and gross exports of goods in
constant prices are calculated by deflating the
import price index of goods and the export price
index of goods respectively. - We get the net exports of goods from
gross exports of goods in constant prices minus
the gross imports of goods in constant prices.
According to the quarterly price indices of the
imported and the exported commodities compiled by
Customs Bureau, we calculate their simple
arithmetic average number, on which we determine
the price indices of the imported and of the
exported goods.
275. Net Exports in Constant Prices
- For the imported and the exported services in
constant prices, since there have not been the
corresponding price indices at present, we
calculate them referring to the import and the
export price indices of goods and the price
indices of the service items.
28IV. Major Issues in Chinas Quarterly GDP
Accounting by Expenditure Approach
- 1. The scope of Chinas quarterly GDP accounting
by expenditure approach is not overall due to the
insufficiency of basic information, while the
requirements of the basic information is not
identical, thus the accounting quality is
affected.
29IV. Major Issues in Chinas Quarterly GDP
Accounting by Expenditure Approach
- 2. Classification of Expenditure Items Is Too
Crude. - 3. Lack of the Price Indices Supporting Quarterly
GDP Accounting by Expenditure Approach
30IV. Major Issues in Chinas Quarterly GDP
Accounting by Expenditure Approach
- Work to do
- In order to improve Chinas quarterly
GDP accounting by expenditure approach, it is
necessary for us to supplement the
insufficiencies of the basic information, to
improve the current statistical survey system, to
improve and perfect the statistical means and
system, to establish the fundamental framework of
the price index system and to set up a set of
collecting system of statistical information
supporting Chinas quarterly GDP accounting by
expenditure approach.