Working Paper No. 473 Chinese Statistics: Output Data by Carsten A. Holz March 2013 Stanford University John A. and Cynthia Fry Gunn Building 366 Galvez Street | Stanford, CA | 94305-6015 Chinese Statistics: Output Data Carsten A. Holz* March 2013 Abstract China is the world’s second-largest economy and its output data are being closely watched. The release of the latest GDP data by China’s National Bureau of Statistics can be felt on stock markets around the globe, and may influence a broad range of economic decisions ranging from companies’ investment strategies to monetary policy. But China’s GDP data are poorly understood. GDP in one year may be revised upward by 16.8 percent, while rural household consumption falls by 26.6 percent and government consumption rises by 41.1 percent. Data series appear to be revised every few years, even outside official benchmark revisions. The labor share in income is retrospectively revised to fall by more than 10 percent, and a few years later it is raised back to near its original level. Nominal data are retrospectively revised when an economic census newly discovers previously uncounted economic activities in the census year, but real growth rates are not retrospectively revised, implying a revised deflator for periods many years earlier. Data series end while series with similarly sounding labels newly start. The list is long. But explanations of what is happening to the data are almost always missing. This manuscript first specifies what official data are available for. It then proceeds to examine the quality of these data: it explains statistical breaks, resolves inconsistencies to the extent possible, and describes the limitations of different series. Third, it recommends particular output series for use in economic analysis and provides these data. Keywords: China; National income accounting; Compilation of GDP and value-added, aggregate expenditures, and national income; National statistical system. JEL Classification No.: C82, O53, P27, R1. * Professor of economics in the Social Science Division at the Hong Kong University of Science & Technology. Visiting scholar at Stanford Center for International Development, Stanford University. Email：[email protected]. Contents 1. Introduction ......................................................................................................................................5 2. Data availability ...............................................................................................................................6 2.1 Sectoral value-added ..................................................................................................................7 2.2 Expenditures ..............................................................................................................................8 2.3 Income........................................................................................................................................9 3. Data quality ......................................................................................................................................9 3.1 Comparison of the results of the three approaches to the calculation of GDP ........................10 3.2 Provincial vs. national data ......................................................................................................11 3.3 Annual revisions of GDP and implicit deflators ......................................................................12 3.4 1995 benchmark revision of NIPA data following the 1993 tertiary sector census ................14 3.5 1996 benchmark revision of industry data following the industrial sector census 1995 and of agriculture data following the agricultural censuses of 1996 and 2006...................................14 3.6 2006 benchmark revision of NIPA data following the 2004 economic census .......................14 3.6.1 Nominal 2006 benchmark revision values vs. earlier published values .......................15 3.6.2 National nominal 2006 benchmark revision values vs. original provincial values .......16 3.6.3 Statistical breaks............................................................................................................16 3.6.4 Benchmark revision real growth rates...........................................................................17 3.6.5 Benchmark revision of expenditure data.......................................................................20 3.6.6 Benchmark revision of income data ..............................................................................23 3.6.7 Implications of the 2006 benchmark revision ...............................................................26 3.7 2007 revision of NIPA data .....................................................................................................26 3.8 2010 benchmark revision of NIPA data following the 2008 economic census .......................27 3.8.1 Value-added ..................................................................................................................27 3.8.2 Expenditures ..................................................................................................................28 3.8.3 Income ...........................................................................................................................28 3.9 Real growth rates of GDP vs. of GDP components .................................................................28 3.10 GDP deflator and NBS compilation of sectoral real output .................................................30 3.11 Directly reporting industrial enterprise data .........................................................................34 4. Choice of output data for economic analysis .................................................................................35 4.1 GDP and value-added of the three main economic sectors .....................................................35 4.1.1 Published prior to the 2006 benchmark revision...........................................................35 4.1.2 Published after the 2006 benchmark revision ...............................................................36 4.2 Value-added of the tertiary sector subsectors ..........................................................................37 4.2.1 Published prior to the 2006 benchmark revision...........................................................37 4.2.2 Published after the 2006 benchmark revision ...............................................................39 4.2.3 Summary of tertiary sector sub-sector data availability ................................................39 4.3 Value-added of the directly reporting industrial enterprises ....................................................39 4.4 Expenditure and income data ...................................................................................................40 5. Conclusions ....................................................................................................................................40 2 Tables Table 1. Value-Added, Expenditures, Income: Key Data Sources and Their Coverage .....42 Table 2. Three Approaches to the Calculation of GDP (values in %) .................................44 Table 3. Summed Provincial Value-Added Divided by National Value-Added .................46 Table 4. Annual Revisions to National Value-Added..........................................................48 Table 5. GDP Real Growth Rates (in %) .............................................................................50 Table 6. Pre- versus Post-Economic Census 2004 Nominal Value-Added for 1978-2004 .51 Table 7. Ratio of Post- to Pre-Economic Census Expenditure Values ................................54 Table 8. Real Growth Rates and Implicit Deflators of Expenditures, Post- Vs. Pre- Economic Census ...................................................................................................56 Table 9. Real Growth Rates and Implicit Deflators of Aggregate Vs. Per Capita Household Consumption ..........................................................................................................58 Table 10. Post- Vs. Pre-Economic Census Income Values, National and Selected Provinces, 1993 and 2002 ........................................................................................................60 Table 11. Pre- and Post-Economic Census 2008 Value-Added .............................................62 Table 12. Post- versus Pre-Economic Census 2008 Expenditures (percentage difference) ..63 Table 13. Official GDP Real Growth Rate Less (Various Versions of) the Weighted Sum of the Sectoral Real Growth Rates .............................................................................64 Table 14. Deflators for Industrial Output...............................................................................66 Table 15. Expenditure Deflators and Price Indices ................................................................71 Figures Figure 1. Nominal GDP: Production Value-Added Divided by Expenditure Value ............45 Figure 2. Pre- and Post-Economic Census 2004 GDP, 1992-2004 .......................................53 Figure 3. Ratio of Post- to Pre-Economic Census Population Numbers Implicit in Aggregate and Per Capita Household Consumption Values .................................55 Figure 4. Shares of Individual Components in Income Approach GDP ...............................59 Figure 5. Industrial Value-Added Deflators ..........................................................................70