1. Some Thoughts after Compiling 2008 SUT of China CHEN Jie Department of National Accounts NBS, China March 2012, Shanghai

2. 2 Outline  Can China compile SUT?  Commodity flow methods used in balancing SUT  Some suggestions on deflate the discrepancy of GDP by production and expenditure approach in China

3. 3 Can China compile SUT? China can compile SUT but for the more reliable and high quality tables, there are something to do:  Basic statistical unit, if not the establishment, Kind-of –activity Unit can be consider.  When the basic unit are determinate, another issue is how to collect information of own consumption of the unit.

4. 4 Can China compile SUT?  The consistent of product statistic and industry statistic  Input-output survey, more effective, pertinence

5. 5 Commodity flow methods When balancing 2008 SUT, methods of commodity flow was used in some products. Example- Rice  The total supply of rice include domestic production and import.  Adjust them at purchaser price.

6. 6 Commodity flow methods Total supply of rice Domestic production Enterprise above designed- size Enterprise under designed- size and getihu import Adjustment of price

7. 7 Commodity flow methods  Domestic production: enterprise above design-size, quantity and average sale price enterprise under design-size, quantity and average sale price ‘getihu’, from the economy census, it is a minor one.

8. 8 Commodity flow methods  Adjustment --quantity : the quantity of products include the one processing for others. Processing for abroad can be distinguish from the custom data  Adjustment--price ： VAT on sales, margin of transport and wholesale and retail 。

9. 9 Commodity flow methods  Import,The import exclude the items for abroad processing.  Adjustment: tariff, VAT

10. 10 Commodity flow methods Total use of rice  Include intermediate use and final use.  The rice could be used for household consumption, inventory and export in the final use.  And could be intermediate consumption for food manufacture and Food & beverage service activities

11. 11 Commodity flow methods Total use Final use Consumption Capital Formation EXPORT Intermediate use

12. 12 Commodity flow methods  Consumption Rural household consumption: data from rural household survey, ‘consumption expenditure of grain’ and ‘purchase of rice’ upper limit and lower limit. Estimate a number between the upper and lower limit. Urban household consumption: data from urban household survey

13. 13 Commodity flow methods  Capital formation ： inventory change enterprise above design-size: opening stock and closing stock data from census enterprise under design-size: by the output proportion with enterprise above design-size  Export ： exclude abroad processing

14. 14 Commodity flow methods  Intermediate use can be calculated by information from the input-output survey.  Rural household consumption can also be derive from the supply and use equation. and compare to the previous estimation.  Compare the new rural household consumption with the old one. in the upper and lower limit, for average are more reasonable.

15. 15 Suggestions on deflate the discrepancy of GDP by two methods  The issues in estimating GDP of China  The production approach in china is a mixed ones actually. For the agriculture is the production approach. And others are income approach, and the surplus item should be disputed on the data and methods.

16. 16 Suggestions on deflate the discrepancy of GDP by two methods  The expenditure approach should base on the products. In China a big proportion of GDP by expenditure is fixed capital formation, mainly base on the investment project survey. The data is so involved and effect the exact of the data.

17. 17 Suggestions on deflate the discrepancy of GDP by two methods  Consistent of the approaches: some methods form own aspect are reasonable but they are conflictive from two sides.  The output and use of agriculture  The output of construction\ work-in –process  Real estate: the issue in output and the use

18. 18 Suggestions on deflate the discrepancy of GDP by two methods  Suggestions  Improve on GDP estimation for production and expenditure approaches  The methods and assumption should be consistent for different approaches  More reliable data source.  Through supply and use balance to find the weak point, but adjustment also need a more reliable data and more information.

19. 19 Thank you ! And comments