Preliminary Accounting Results of GDP for the Fourth Quarter and the Whole Year of 2021

National Bureau of Statistics of China2022-01-19 09:30

According to the relevant basic data and the method of national economic accounting, the main results of the preliminary accounting of China's GDP in the fourth quarter and the whole year of 2021 (hereinafter referred to as GDP) are as follows:

Preliminary Accounting Results of GDP for the Fourth Quarter and the Whole Year of 2021

Notes:

1. The total is computed at current price, and growth rate is computed at constant price.

2. The Three Industries Classification is according to the Three Industries Classification Regulations enacted in 2018 by the NBS.

3. Industrial Classification adopts the “Industrial Classification for National Economic Activities" ( GB/T4754－2017).

4. Due to error generated from rounding off of numerical value, among the total GDP and its data composition, some data is not equal to the sum of all industries, and no mechanical adjustment is made for that.

Other related accounting results can be found in the NBS database (http://data.stats.gov.cn). 

Annotations:

Quarterly GDP Accounting Instructions of China

1. Overview on Quarterly GDP Accounting

1.1 Basic Concepts

Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country during a certain period of time. GDP is the core indicator of the national accounts, and also an important indicator to measure the economic conditions and the level of development of a country.

In the practice of national accounting, gross domestic product is calculated using three approaches, namely production approach, income approach and expenditure approach, which reflect gross domestic product and its composition from different angles. The production approach refers to remove the value of intermediate goods and services from the value of goods and services created in the production process, and to get the value-added. The accounting formula as follows: value-added = total output - intermediate inputs. The GDP by production approach is the sum of value-added by production approach of various industries of national economy. The income approach refers to accounting the production activities from the point of generating income during the production process. Under this accounting method, the sum of the value-added obtained from four parts: workers compensation, net taxes on production, depreciation of fixed assets and operating surplus. The accounting formula as follows: value-added = workers compensation + net taxes on production + depreciation of fixed assets + operating surplus. The GDP by income approach equals to the sum of value-added by income approach of various industries of national economy. GDP by expenditure approach refers to the method of measuring GDP from the perspective of the final uses of production activities. The final uses include final consumption expenditure, gross capital formation and net export of goods and services.

National Bureau of Statistics released quarterly GDP used the production method which based on the result of basic accounting.

1.2 Accounting Coverage

1.2.1 Production Coverage

Production range of GDP accounting includes the following four parts: first, the production of goods and services provided to or ready to provide to other units by the producers; second, self-sufficient production of goods for own final consumption or capital formation by the producers; third, self-sufficient production of knowledge carrier products for own final consumption or capital formation by the producers, excluding similar activities undertaken by the household sector; housing services; fourth, housing services provided by owner-occupied housing, as well as self-sufficient production of household and personal services provided by paid family service personnel. Production range does not include unpaid household and personal services, nor no units controlled natural activities (such as wild, non-cultivated forest, berries or wild berries natural growth, the natural growth of the number of fish in the public sea), etc.

1.2.2 Geographical Scope

The GDP accounting range principally covered all economic activities of all resident units having center of economic interests within China's economic territory. The quarterly GDP data in this report is national data produced by the NBS, GDP data of Hong Kong SAR, Macao SAR, and Taiwan Province is not included.

1.3 Accounting Unit

GDP accounting mainly uses corporate units as the accounting units, in the process of accounting, the corporate units are divided into different industries according to their principal activities, and calculate the value-added of each industry separately, and then aggregate the value-added of every industry into GDP.

1.4 Accounting Frequency

The accounting frequency was quarterly. From the first quarter of 1992 to the second quarter of 2015, China accounted the quarterly GDP cumulatively, which means calculating the GDP of the first quarter, the 1-2 quarters, the 1-3 quarters and the 1-4 quarters respectively, and the GDP preliminary accounting of 1-4 quarters is the annual GDP preliminary accounting. Since March 2015, China's quarterly GDP accounting is completed quarterly, which means calculating the GDP of four quarters respectively, and totaling them up to produce the annual GDP preliminary accounting results.

Starting from the first quarter of 2011, the NBS officially releases quarter-on-quarter GDP growth rate.

1.5 Related Laws and Regulations

GDP accounting was strictly complying with the provisions of the Statistics Law of the People's Republic of China. At present, China's GDP was measured in accordance with the requirements of the China's System of National Accounts (CSNA) (2016), which has adopted the basic accounting principles, contents and methods of the United Nation's System of National Accounts (SNA) 2008.

1.6 Confidentiality

According to the Article 9, Chapter I of the Statistics Law of the People's Republic of China, statistics institutions and statisticians shall keep confidential the State secrets, business secrets and personal information that are learned in the process of statistical work.

The staff related to national accounting will strictly keep the confidentiality of the statistical data of subject matter areas and administrative records data used in GDP accounting, so as to the GDP results of the current period before releasing.

1.7 User Needs

The main domestic users of quarterly GDP data are the government departments, research institutions, universities, trade associations, the media, and the public. In addition, the NBS regularly provides China’s quarterly GDP data to international organizations, such as the UN, the IMF, OECD, ADB, etc.

2. Accounting Methods of Quarterly GDP

2.1 Classifications

During quarterly GDP accounting, industry classification is carried out in two ways, according to the Industrial Classification for National Economic Activities of China and the Three Industries Classification Standard.

The first classification is the Industrial Classification for National Economic Activities, adopting the “Industrial Classification for National Economic Activities” ( GB/T4754－2017) issued by national standard administrative department. Two-level classification is used in the actual accounting.

The first level of classification is basically the sectors in the Industrial Classification for National Economic Activities, and is divided into agriculture, forestry, animal husbandry and fisheries, industry, construction, wholesale and retail trade, transport, storage and post, accommodation and restaurants, finance, real estate, information transmission, software and information technology services, renting and leasing activities and business services, and other service industries. Of which, industry includes three sectors, i.e., mining and quarrying, manufacturing, production and distribution of electricity, heating power, gas and water. Other services include seven sectors, i.e., scientific research and development, technical services, management of water conservancy, environment and public facilities, resident services, repair and other services, education, health care and social works, culture, sports and entertainment, public administration, social security and social organizations.

The second level of classification is, based on the first level of classification, dividing parts of sectors of the Industrial Classification for National Economic Activities into divisions.

The second classification is the Three Industries Classification, according to the Three Industries Classification Regulations enacted in 2018 by the NBS, divided into primary industry, secondary industry and tertiary industry. Primary industry refers to agriculture, forestry, animal husbandry, fisheries (excluding service industries of agriculture, forestry, animal husbandry and fisheries); secondary industry refers to mining and quarrying (excluding mining support service activities), manufacturing (excluding repair of  fabricated metal products, machinery and equipment), production and distribution of electricity, heating power, gas and water, construction; tertiary industry is service industry, and refers to the other industries except primary and secondary industry (excluding international organizations).

2.2 Sources of Data

During the quarterly GDP accounting, all available and applicable economic survey data are used for GDP accounting. Mainly including two parts:

The first part is national survey data, which refers to the various statistical data obtained from the statistical surveys conducted by the national statistical system, such as statistical survey data of agriculture, forestry, animal husbandry and fisheries, industry, construction, wholesale and retail trade, hotel and catering services, real estate, etc., sampling survey data of services industry, data of population and labor, wages statistics, and data of price statistics, etc..

The second part is the administrative record data from administrative departments, mainly includes relevant data from the Ministry of Finance, the People's Bank of China, State Administration of Taxation, the China Insurance Regulatory Commission, China Securities Regulatory Commission, for example, financial institutions and foreign currency credit balance of payments situation of the People's Bank of China, and tax information by industry of the State Administration of Taxation.

2.3 Accounting Methods

2.3.1 Current Price Accounting Method

According to the sources, the accounting of quarterly value-added at current price mainly use methods as value-added ratio, related value indicators computing, using constant price to compute current price.

2.3.1.1 Estimating method using growth rates of related value indicators

This method means, computing the growth rate of value-added at current price by using the growth rates of related value indicators at current price, then multiplying the value-added at current price in the same period of last year and the computed growth rate of value-added at current price, and then obtaining value-added at current price. The accounting formula is as follows:

Value-added at current price = value-added at current price in the same period of last year × (1+ growth rate of value-added at current price)

Of which, the growth rate of value-added at current price is determined according to the growth rates of related value indicators in current period, and the quantitative relation between the growth rate of value-added at current price and the growth rates of related value indicators at current price in previous years.

2.3.1.2 Method of using constant price to compute current price

This method means, first obtaining value-added at constant price in current period by using material quantity index extrapolation method, then computing value-added at current price according to relevant price indices. The accounting formula is as follows:

Value-added at constant price = value-added at constant price × price index

2.3.2 Accounting Methods of Value-added at Constant Price

Value-added at constant price is the value that replaces value-added at current price with value at price of a fixed period (base period), thus excluding the impact of price changing factors, to make the values of different periods comparable. Value-added at constant price is calculated using fixed base period method, and currently the base period is replaced once every five years. From 2021 to 2025, the base period of value-added at constant price is 2020.

The accounting of quarterly value-added at constant price mainly uses methods of price index deflation and relevant volume indices extrapolation.

2.3.2.1 Method of price index deflation

This method means directly deflating value-added at current price by using relevant price index, and calculating value-added at constant price. The accounting formula as is follows:

Value-added at constant price of some industry = value-added at current price of the industry÷ price index of the industry

2.3.2.2 Method of volume indices extrapolation.

This method means calculating the growth rate of value-added at constant price by using the growth rate of relevant volume indices, then multiplying value-added at constant price in the same period of last year and the calculated growth rate of value-added at constant price, to obtain current value-added at constant price. The accounting formula is as follows:

Value-added at constant price of some industry = value-added at constant price of the industry in the same period of last year × (1+ growth rate of value-added at constant price of the industry)

Of which, the growth rate of value-added at constant price is determined according to the growth rate of relevant volume indices this year, as well as the quantitative relation between the growth rate of value-added at constant price and the growth rate of relevant volume indices in previous years.

2.4 Seasonal Adjustment

The quarter-on-quarter growth rate of GDP is the result of comparison of value-added in this quarter and value-added in last quarter. When calculating, it is necessary to exclude the impact of seasonal factors on time series. Seasonal adjustment of time series has been completed by using NBS version seasonal adjustment software (NBS-SA). On the basis of currently international common seasonal adjustment software, and considering the unique seasonal factors in China, NBS-SA has been developed. This software has added a new module to handle the unique seasonal factors in China, made effective exclusion of the unique seasonal factors, such as the mobile holiday factors of the Spring Festival, the Dragon Boat Festival, and the Mid-Autumn, as well as the changing factors that weekly number of working days decreased from 6 days to 5 days, and changing factors of holidays movements and shift leave.

3. Revision of Quarterly GDP Data

3.1 The Necessity for Revision

Preliminary accounting of quarterly GDP data has a strong demand for timeliness, generally it is released about 15 days postseason. At this time, the basic information needed in GDP accounting cannot be acquired completely, so preliminary accounting of GDP data is estimated using monthly statistical data of subject matter areas and related indicators. After that, as the available basic information continues to increase and to improve, more complete basic information will be used to revise GDP data, such as annual report of subject matter areas, financial data of different industries, sample survey data and final financial accounting data, therefore making it to reflect the actual situation of economic development more accurately.

3.2 Revision Procedures

According to the latest reform of the NBS in GDP accounting and data release system, China’s quarterly GDP accounting has two steps, which are preliminary accounting and final verification. Typically, after final verification of the annual GDP, quarterly data is to be revised, which is called regular revision. When carrying out national economic census and having found new basic information that has a great impact on GDP data, or with calculation methods and classification criteria changing, the historical annual GDP data is to be revised, as well as the historical quarterly GDP data is to be revised accordingly. This called comprehensive revision.

3.3. Revision Methods

3.3.1 Revision of Cumulative Data

Currently, China’s revision methods of quarterly GDP data is proportional connection, which means adjusting quarterly data by using the margin of reference value for the year and the sum of four quarters of the year. The basic steps of proportional connection are: First, connect value-added at current price and constant price of different industries in the national economy respectively. GDP and the value-added of three industries are the sum of connected value-added of different industries. Connecting methods of GDP at constant price and value-added at constant price of three industries are the same with that at current price.

3.3.2 Revision of Quarter-on-Quarter Data

As the object of seasonal adjustment is time series data, therefore, when any quarterly data in the time series changes, the results of seasonal adjustment will be affected. The increase of a latest quarterly data into the time series, the quarter-on-quarter data in previous quarters will be changed more or less. These are the results of auto-revision of the model. According to the principle of seasonal adjustment, under normal circumstances, the closer to the period of the latest data, the more influence to the data, and the farther away from the period of the latest data, the less influence to the data. For the convenience of users, at the same time of releasing current quarter-on-quarter data, the revised quarter-on-quarter data in previous quarters will also be released on the NBS website.

4. Quality Assessment on Quarterly GDP Data

4.1 Assessment on Basic Data

For the statistical data of subject matter areas and the administrative records data used in GDP accounting, the relevant departments will examine their quality to ensure that the data reasonably reflect the actual situation of economic development. After getting these basic data, The GDP accounting department will examine the completeness and accuracy of the data once again to ensure that these data are consistent with the GDP accounting concepts and requirements.

4.2 Assessment on Accounting Methods

In GDP accounting process, the GDP accounting department will revise China's quarterly GDP accounting method in accordance with the actual situation of China’s continually developing economy, and the standards of national accounting which are constantly improving, so as to ensure the rationality of accounting methods.

4.3 Assessment on Accounting Results

After getting the quarterly GDP accounting results, it is needed to examine the data of each component of GDP, as well as the coherence of GDP data and the statistical data of related subject matter areas, statistical data from different departments and macroeconomic data, to ensure the coherence and matching of GDP data and other key data. A system that takes the national economic accounts as the core framework, and assesses basic statistical data of different subject matter areas and basic statistical data of different departments, is being established.

4.4 Comparability of Data

China's System of National Accounts (2016) adopted the basic accounting principles, contents and methods of the United Nation's System of National Accounts (SNA) 2008，therefore the GDP data are internationally comparable.

After the national economic censuses have been carried out, or the calculation methods and classification criteria have been changed, historical quarterly GDP data have been revised. Therefore, time series data of quarterly GDP are comparable since the first quarter of 1992.

5. Quarterly GDP Data Release

5.1 Release Date

Generally, the preliminary accounting data of quarterly GDP are released about 15 days after the season, the final verification data of quarterly GDP are released in the following January. For the release of key statistical indicators, NBS will announce the release date in the Regular Press Release Calendar which is published at the beginning of the year, and GDP data will be released on time according to the regular schedule.

5.2 Release Methods

Preliminary accounting data of quarterly GDP will be released at the Quarterly Press Conference on Economic Situation, on the NBS website (www.stats.gov.cn), and in the “China Monthly Economic Indicators”. Final verification data of quarterly GDP will be released in the national statistical database (http://data.stats.gov.cn/), and the “China Monthly Economic Indicators”. The time series data of quarterly GDP since the first quarter 1992 can be queried in the national statistical database (http://data.stats.gov.cn/).