National Bureau of Statistics of PRC

Improvements on the Issues of 12th Workshop: Finance,

Health, Education and Owner Occupied Dwelling

Estimation LU Feng

Department of National Accounts, NBS

30 Nov., 2009 Haikou, China

1. FISIM Estimation

From 2008, the NBS begins to use reference

rate approach to calculate the FISIM, which is an

important improvement in the GDP estimation of

China.

Finance: Banking Industry

1. FISIM Estimation

Old method:

FISIM = (Loan interest revenue - Deposit interest expense)

+(Revenue from transactions with financial institutions

- Expense from transactions with financial

institutions)

+ Investment revenue

+ Rental revenue

Finance: Banking Industry

1. FISIM estimation

New method:

FISIM for the depositors = Annual average deposits of

financial institutions × Reference rate – Actual interest

payment of deposits

FISIM for the borrowers = Actual interest income of loans –

Annual average loans of financial institutions ×Reference rate

Finance: Banking Industry

1. FISIM estimation

New method:

Total FISIM = FISIM for the depositors + FISIM for the

borrowers

Where,

Reference rate = (Deposit rate + Loan rate) ÷ 2

Finance: Banking Industry

2. The central bank of China – the

People’s Bank of China now is treated

as enterprise institution in GDP

estimation. Before, it was treated as

government institution.

Finance: Banking Industry

1. Real VAD Estimation

The real value-added estimation of

securities now uses volume extrapolation

approach instead of single deflation

approach.

Finance: Securities Industry

1. Real VAD Estimation

Old method:

Real VAD = Nominal VAD / Deflator

where the deflator is equal to the weighted

average of CPI and IPI (Investment Price

Index).

Finance: Securities Industry

1. Real VAD Estimation

New method:

Real VAD = Real VAD of last year

× Stock transaction volume index

Finance: Securities Industry

2. Nominal VAD is subdivided into

more detailed level to calculate.

According to the Second Economic

Census’s data, value added of

securities is subdivided into three

parts, which are securities, fund and

futures.

Finance: Securities Industry

3. The treatment of stamp duty on

securities transactions is improved.

Now only stamp duty of securities

transactions paid by agencies is

treated as production tax of securities,

not including stamp duty on securities

transactions paid by individuals.

Finance: Securities Industry

Real VAD Estimation

Real VAD estimation still uses the

single deflation method, but the

deflator is improved.

Finance: Insurance Industry

Real VAD Estimation

Old method:

Deflator = Weighted average of CPI and IPI

New method:

Deflator = (Investment revenue / Insurance output) × Deflator of securities + [(Insurance output － Investment revenue) ÷ Insurance output] × Weighted average of CPI and IPI

Finance: Insurance Industry

Real VAD Estimation

Real VAD estimation still uses the

single deflation method, but the

deflator is improved.

Health

Real VAD Estimation

In the old method, the deflator was the

health care and personal articles price

index, while in the new method the

deflator is the health care price index.

Health

Real VAD Estimation

As education includes both market

activities and nonmarket activities,

now we use the average of deflation

method result and quantity

extrapolation method result as the real

VAD result of education.

Education

Real VAD Estimation

Old method:

Real VAD = Nominal VAD / Education price index

Education

Real VAD EstimationNew method:

Real VAD = (Real VAD_Def + Real VAD_Exa) / 2

Where,

Real VAD_Def = Nominal VAD / Education price index

Real VAD_Exa = Real VAD of last year × employee number index

Education

Real VAD Estimation

The real value-added estimation of Owner

Occupied Dwelling now uses volume

extrapolation approach instead of single

deflation approach.

Owner Occupied Dwelling

Real VAD Estimation

Old method:

Real VAD = Nominal VAD / Deflator

where the deflator is the renting price index of houses.

New method:

Real VAD = Real VAD of last year × Floor space of residents index

Owner Occupied Dwelling

Thank you for your attention!