Improvement of China QGDP Dong Lihua Dept. of National Accounts, NBS

Overview  QGDP began in 1992, established Experimental Scheme for Quarterly GDP Estimation Features: 1.Accumulated accounting 2.By industries 3.Method: Production approach, Extrapolation

 1997, Method of Quarterly GDP Estimation of China  2000, Method of Quarterly GDP Estimation ;  2004, Some Complementary Regulation for Quarterly Regional GDP Estimation  2006, Method of Quarterly GDP Estimation (tentative) Overview

Improvement in recent years Study the method of calculating Chain growth  1. Develop X-12-ARIMA-NBS a.NBS and Nankai University jointly organize Technique Group,Benefit from experiences of OECD and Statistics Canada b.Base on X-12-ARIMA c.Take into account Chinese factors, such as moving holidays, Effect of change of working days since 1995; Effect of “Goldenweek” holidays since 2000; Effect of adjusting working day for “Goldenweek” holidays

Chinese factors  Effect of Moving Holidays:  There are Spring Festival, Mid-autumn Festival, Qingming Festival and Dragon boat Festival. Their effects are reflected by the relevant variables

Chinese factors  Effect of Changing Workdays  Since April 1995, the working time has changed from 6 days per week to 5 days per week. The effect reflected by redefined workday effect of X12.

Chinese factors  Effect of golden week  Golden week is appeared in Oct As the name implies, golden week is a seven-days holiday which consists of nation holiday/labor holiday/spring festival and its adjacent weekend. This effect is adjusted by relative variables.

Chinese factors  Effect of working days shift  In order to make the golden week seven days, sometimes we need to exchange several working days with weekend. Obviously, it will change the effect of working days and trading days. For this reason, we redefined the relative variables of trading days.

Improvement in recent years d. Set up X-12-ARIMA-NBS for Chinese seasonal adjustment  2. Seasonal Adjustment for 18 selected indicators

Quarterly Indicators  1.GDP  2.Agriculture  3.Industry  4.Contruction  5.Transport, Postal and Telecommunication  6. Wholesale and Retail  7. Hotel and Catering  8.Finance  9.Real Estate  10.Others  11.Wage and Salary

Monthly Indicators  1.Value-added of Industrial Enterprises above Designated size  2.Total Retail Sales of Consumer Goods  3.Investment in Fixed Assets  4.Freight Ton-Kilometers  5.Electricity Consumption  6.CPI  7.PPI

Improvement in recent years  3. Collect and process the basic data of 18 indicators  4. Challenges in Practice a. Accumulate data convert to separate data b. Statistical coverage changes c. Statistical period is not complete in practice. for example, one month usually missed in service sector survey.

Improvement in recent years  d. The length of time series is not enough  e. Master seasonal adjustment technique as soon as possible  f. Chain growth and Growth year on year, which one is dominant?  g. Whether annualized or not?

Improvement in recent years  Study the method of quarterly GDP by Expenditure Approach and implement on trial. 1.Accumulated quarterly accounting 2.The primary method

The primary method Items of Expenditure Method of EstimationBasic Data Household Consumption Expenditure (HCE) Extrapolation Extrapolated indicator: (1) Growth rate of HCE=Growth rate of per capita HCE×Growth rate of total population (2) Growth rate of Investment in owner- occupied dwelling (1) Household sample survey: Per capita rural resident HCE in cash, Per capita urban resident HCE; (2) Investment in fixed assets statistical survey; (3) CPI

The primary method Government Consumption Expenditure Extrapolation ， Extrapolated indicator: Growth rate of General government current expenditure (1) Financial statistical data (2) Price index of Investment in fixed assets and CPI Gross Fixed Capital Formation Extrapolation ， Extrapolated indicator: ： Growth rate of total investment in fixed assets in the whole country (1) Investment in fixed assets statistical survey, (2) Price index of Investment in fixed assets

The primary method Change in Inventory Change in inventory =value of end of period － value of beginning of period (1))Financial statistical data ： Inventory of state-owned enterprises (2)Industry statistical survey ： Inventory of finished goods of industrial enterprises above designated size (3)Wholesale and retail trade statistical survey ： Inventory of enterprises above designated size (4)PPI

The primary method Net Exports Net Exports= Exports-Imports (1) The Customs Statistical Data (2) BOP (3) Price indices of goods of imports and exports

Improvement in recent years 3. Challenges in practice  Growth rate of total population is not available while estimating HCE  It is difficult to estimate and deduct cost of land from investment infixed assets while estimating GFCF

 Inventories other than state-owned units are missing while estimating change in inventory  Problems exist in Price indices of exports and imports  Choice of accumulated accounting and separated accounting  Coordinate the difference between GDP by industry and GDP by Expenditure approach

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