Explanatory Notes on Main Statistical Indicators

Gross Domestic Product (GDP)   refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. Gross domestic product is expressed in three different perspectives value added, income, and products respectively. The form of value added refers to the total value of all products and services produced by all resident units during a certain period of time minus total value of intimidate input of materials and services of the nature of non-fixed assets or the summation of the value added of all resident units; the form of income includes all the income created by all resident units and distributed primarily to all resident and non-resident units; the form of products refers to all final goods and services of final use by all resident units plus the value of net exports of goods and services. In the practice of national accounting, gross domestic product is calculated with three approaches, i.e. product approach, income approach and expenditure approach, which reflect gross domestic product and its composition from different aspects.

Three Strata of Industry   Classification of economic activities into three strata of industry is a common practice in the world, although the grouping varies to some extent from country to country. In China, according to Industrial classification for National Economic Activities (GB/T 4754—2011) and Dividing Basis of Three Industries, economic activities are categorized into the following three strata of industry:

Primary industry refers to agriculture, forestry, animal husbandry and fishery industries (not including services in support of agriculture, forestry, animal husbandry and fishery industries).

Secondary industry refers to mining and quarrying (not including support activities for mining), manufacturing (not including repair service of metal products, machinery and equipment), production and supply of electricity, heat, gas and water, and construction.

Tertiary industry refers to all other economic activities not included in the primary or secondary industries.

GDP by Income Approach   refers to the method of measuring the final results of production activities of a country (region) during a given period from the income items produced by all resident units. It includes laborers’ remuneration, net taxes on production, depreciation of fixed assets and operating surplus, i.e.:

GDP by income approach =compensation of employee + net taxes on production + depreciation of fixed assets + operating surplus

(I)Compensation of Employees refers to the total payment of various forms to employees for the productive activities they are engaged in. It includes the employees earn in cash or in kind. It mainly include: wages, bonuses and allowances, subsidies, social insurance paid by company or unit for its staff, supplementary social insurance, housing fund, the pension for the employees of the administrative institution, other forms of welfare and remuneration provide by the units for its employees.

(II)Net Taxes on Production refers to taxes on production less subsidies on production. The 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 etc. in the production activities they are engaged in. Taxes on production are divided into product tax and other kinds of taxes on production, product tax mainly includes: value-added tax, consumption tax, import duty, export duty; other taxes on production mainly include: House Property Tax, Tax on Vehicles and Boat Operation, Urban Land Use Tax, etc. In contrast to taxes on production, subsidies on production refer to the payment by the government for free to the production units to influence production activities of production units such as production, sales and pricing, which include agricultural production subsidies, subsidies for policy losses, import subsidies, etc. Subsidies on production are therefore regarded as negative taxes on production.

(III)Depreciation of Fixed Assets refers to the decline of the value of fixed assets due to natural deterioration, normal elimination or loss, it reflects the value of transfer of the fixed assets in the production of the current period. In principle, the depreciation of fixed assets should be calculated on the basis of the re-purchased value of the fixed assets.

(IV)Operating Surplus refers to the balance of the value added created by the resident units after deducting the labourers remuneration, net taxes on production and the depreciation of fixed assets.

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, i.e.:

GDP by expenditure approach = final consumption expenditure + gross capital formation + net export of goods and services

Final Consumption Expenditure   refers to the total expenditure of resident units on final consumption 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.

(I) Gross Fixed Capital Formation refers to the value of acquisitions less those disposals of fixed assets during a given period. Fixed assets are the assets produced through production activities with unit value above a specified amount and which could be used for over one year. Natural assets, consumer durables, small  instruments are not included. Gross Fixed Capital Formation includes the value of housing, other buildings and structure, equipment and machinery, breeding biological resources, intellectual property right product (expenditure for R&D, the prospecting of minerals and the acquisition of computer software) minus the disposal of them.

(II) Changes in Inventories refers to the market value of the change in the physical volume of inventory of resident units during a given period, i.e. the difference between the values at the beginning and at the end of the period minus the gains due to the change in prices. The changes in inventories can have a positive or a negative value. A positive value indicates an increase in inventory while a negative value indicates a decrease in inventory. The inventory includes raw materials, fuels and reserve materials purchased by the production units as well as the inventory of finished products, semi-finished products and work-in-progress.

Gross Capital Formation   refers to the net amount of the fixed assets and stock acquired minus those disposed, including the gross fixed assets formation and changes in inventories.

(I) Gross fixed capital formation refer to the value of fixed assets purchased, transferred in by the resident units and those produced and used by themselves deducting the value of fixed assets sold and transferred out. It can by classified into total tangible assets formation and total intangible assets formation. The total tangible assets 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, milk, wool and recreational animals and the newly increased economic forest in a certain period. The total intangible assets formation includes the prospecting of minerals, the acquisition of computer software, the originals of recreational works and works of literature and arts minus the disposal of them.

(II) Changes in Inventories refers to the market value of the change in the physical volume of inventory of resident units during a given period, i.e. the difference between the values at the beginning and the end of the period minus the gains due to the change in prices. The changes in inventories can have a positive or a negative value. A positive value indicates an increase in inventory while a negative value indicates a decrease in inventory. The inventory includes raw materials, fuels and reserve materials purchased by the production units as well as the inventory of finished products, semi-finished products and work-in-progress.

Net Export of Goods and Services   refers to the exports of goods and services subtracting the imports of goods and services.  Exports include the value of various goods and services sold or gratuitously transferred by resident units to non-resident units. Imports include the value of various goods and services purchased or gratuitously acquired resident units from non-resident units. Because the provision of services and the use of them happen simultaneously, the acquisition of services by 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 exports and imports of goods are calculated at FOB.

Share of the Contributions of the Industry   refers to the proportion of the increment of the value-added of each industry to the increase of GDP.

Contribution of the Industry   contribution is the driven percentage points to GDP growth. Contribution of the industry is the driven percentage points of each industry to GDP growth. Its calculation formula is:

contribution ( %) = share of contribution (%) × GDP growth rate (%)