Draft Measuring Chinese Productivity Growth, 1952-2005 Carsten A. Holz Social Science Division Hong Kong University of Science & Technology Clear Water Bay, Kowloon, Hong Kong E-mail: [email protected] Tel/fax: +852 2719-8557 Much of the sections on capital and TFP are at very first draft stage. 22 July 2006 List of abbreviations CPI Consumer Price Index DRIE Directly reporting industrial enterprise GDP Gross domestic product GFCF Gross fixed capital formation GNP Gross national product GOV Gross output value NBS National Bureau of Statistics NIPA National Income and Product Accounts SOE State-owned enterprise SOU State-owned unit TFP Total factor productivity CH-to-Paul-Schreyer-China-prod-m-22July06.doc ii Table of Contents 1. Introduction..........................................................................................................................1 1.1 Objectives....................................................................................................................1 1.2 Coverage and structure of this paper...........................................................................1 1.3 Basic data issues..........................................................................................................2 1.3.1 Industry/ sectoral classification .......................................................................2 1.3.2 Benchmark revisions following the economic census 2004............................4 1.3.3 Limits to understanding China’s statistics.......................................................5 2. Output ..................................................................................................................................6 2.1 Data availability...........................................................................................................6 2.1.1 Production approach to the calculation of value added...................................7 2.1.2 Expenditure approach to the calculation of value added.................................8 2.1.3 Income approach to the calculation of value added ........................................9 2.2 Data quality.................................................................................................................9 2.2.1 Comparison of the results of the three approaches to the calculation of GDP 9 2.2.2 Provincial vs. national data............................................................................10 2.2.3 Derivation of GDP real growth rate from sectoral real growth rates ............11 2.2.4 Annual revisions of GDP data.......................................................................11 2.2.5 Benchmark revisions of GDP data ................................................................13 2.2.5.1 Tertiary sector census 1992/93..........................................................13 2.2.5.2 Industrial sector census 1995.............................................................13 2.2.5.3 Economic census 2004 and the 2004/05 benchmark revisions .........14 2.2.5.4 Sectoral classification of the 2004/05 benchmark revisions .............14 2.2.5.5 Nominal 2004/05 benchmark revision values vs. earlier published values.................................................................................................16 2.2.5.6 National nominal 2004/05 benchmark revision values vs. original provincial values................................................................................16 2.2.5.7 2004/05 benchmark revision vs. earlier published real growth rates 17 2.2.5.8 Economic census 2004 and expenditure/ income approach GDP .....22 2.2.5.9 Summary implications of the 2004/05 benchmark revisions ............23 2.2.6 GDP deflator..................................................................................................24 2.2.7 Official GDP coverage and margin of error..................................................27 2.2.8 Directly reporting industrial enterprise data..................................................29 2.3 Choice of output data for productivity analysis ........................................................31 2.3.1 Economy-wide and three main economic sectors, prior to 2004 economic census benchmark revision............................................................................31 2.3.2 Economy-wide and three main economic sectors, following the 2004 economic census benchmark revisions..........................................................32 2.3.3 Tertiary sector sub-sectors.............................................................................34 2.3.4 Directly reporting industrial enterprises........................................................36 3. Labor..................................................................................................................................37 3.1 Data availability.........................................................................................................37 3.1.1 Laborers in the population censuses and 1% population sample surveys.....37 3.1.2 Economy-wide time series total and sectoral labor data ...............................38 3.1.2.1 Economy-wide, and three main economic sectors, 1952-present .....38 CH-to-Paul-Schreyer-China-prod-m-22July06.doc iii 3.1.2.2 16 (13) sectors, 1978-2002................................................................40 3.1.2.3 Agriculture vs. non-agriculture, 1952-95 ..........................................40 3.1.2.4 Material vs. non-material production sectors, 1952-92.....................40 3.1.3 Urban vs. rural employment, and urban ownership classification ................41 3.1.4 Urban employment by sector.........................................................................41 3.1.5 Staff and workers...........................................................................................42 3.1.6 Rural laborers................................................................................................43 3.1.7 Non-population censuses...............................................................................44 3.1.8 Directly reporting industrial enterprises........................................................44 3.2 Employment definitions and statistical breaks..........................................................44 3.2.1 Definition of laborers in the population censuses and 1% population sample surveys...........................................................................................................44 3.2.2 Alternative definition of laborers ..................................................................45 3.2.3 On-post vs. not-on-post staff and workers ....................................................47 3.2.4 Unemployment ..............................................................................................48 3.2.5 Summary implications...................................................................................48 3.3 Data quality...............................................................................................................50 3.3.1 Employment in population censuses and 1% sample surveys.......................50 3.3.2 Revised employment data in the Statistical Yearbook ..................................50 3.3.3 Report form data on employment, including detailed sectoral data..............52 3.3.4 Data comparisons ..........................................................................................52 3.3.4.1 Two sets of economy-wide and sectoral series .................................53 3.3.4.2 Discrepancies between population census sectoral values and other sectoral values ...................................................................................53 3.3.4.3 Dubious data quality in the pre-reform period ..................................54 3.3.4.4 Additional data ..................................................................................55 3.4 Hours worked............................................................................................................55 3.5 Choice of labor data for productivity analysis ..........................................................57 3.5.1 Economy-wide employment..........................................................................57 3.5.2 Three main economic sectors ........................................................................58 3.5.3 Detailed sectoral values (16 sectors, other classifications) ...........................59 3.5.4 Directly reporting industrial enterprises........................................................59 4. Capital................................................................................................................................60 4.1 Data availability.........................................................................................................60 4.1.1 Fixed asset data..............................................................................................60 4.1.1.1 Fixed asset definition.........................................................................60 4.1.1.2 Availability of original values of fixed assets ...................................62 4.1.1.3 Availability of depreciation data .......................................................62 4.1.2 Investment data..............................................................................................63 4.1.2.1 Gross fixed capital formation ............................................................63 4.1.2.2 Investment in fixed assets..................................................................63 4.2 Data quality...............................................................................................................64