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Accounting Method for Chinas Quarterly GDP by Expenditure Approach

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1) Initial accounting: 15 days after each quarter. 2) Initial check: 45 days after each quarter ... cash consumption expenditures of the current quarter ... – PowerPoint PPT presentation

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Title: Accounting Method for Chinas Quarterly GDP by Expenditure Approach


1
Accounting Method for Chinas Quarterly GDP by
Expenditure Approach
  • QIU, Qiong
  • Dept. of National Accounts, NBS

2
I. 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

3
I. 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

4
II. 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.

5
1. 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.

6
1. 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

7
1. 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

8
2. 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. )

9
2. 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.

10
3. 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

11
4. 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

12
4. 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

13
4. 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

14
5. 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.

15
5. 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.

16
5. 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.

17
5. 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.

18
6. 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

19
6. 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.

20
III. 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.

21
1.     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.

22
2.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.

23
3. 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

24
3. 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.

25
4. 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.

26
5. 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.

27
5. 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.

28
IV. 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.

29
IV. 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

30
IV. 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.
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