Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. Gross domestic product is expressed in three different forms, i.e. value, income, and products respectively. GDP in its value form refers to the total value of all goods and services produced by all resident units during a certain period of time, minus the total value of input of goods and services of the nature of non-fixed assets; in other term, it is the sum of the value-added of all resident units. GDP in the form of income includes the income created by all resident units and distributed to resident and non-resident units. GDP in the form of products refers to the value of all goods and services for final consumption by all resident units minus the imports of goods and services during a given period of time. In the practice of national accounting, gross domestic product is calculated with three approaches, i.e. production approach, income approach and expenditure approach, which reflect gross domestic product and its composition from different aspects.
For a Region, Gross Domestic Product. is called Region GDP.
Three Industries Classification of economic activities into
three branches of industries is a common practice in the world, although the
grouping varies to some extent form country to country. In
Primary industry: refers to agriculture, forestry, animal husbandry and fishery.
Secondary industry: refers to mining and quarrying, manufacturing, production and supply of electricity, water and gas, and construction.
Tertiary industry: refers to all other economic activities not included in primary or secondary industry.
Labourers Remuneration refers to the whole payment of various forms earned by the labourers from the productive activities they are engaged in. It includes wages, bonuses and allowances the labourers earned in monetary form and in kind. It also includes the free medical services provided to the labourers and the medicine expenses, traffic subsidies and social insurance, housing fund paid by the employers. As the individual economy is concerned, since the labourers remuneration is not easily distinguished from the operating profit, both are treated as labourers remuneration.
Net Taxes on Production refers to the difference of the taxes on production minus the subsidies on production. The taxes on production refers to the various taxes, extra charges and fees levied on the production units on their production, sale and business activities as well as on the use of some factors of production, such as fixed assets, land and labour in the production activities they are engaged in. In contrast to the taxes on production, the subsidies on production refer to the unilateral government transfer to the production units and are therefore regarded as negative taxes on production. They include subsidies on the loss due to implementation of government policies, price subsidies, etc.
Depreciation of Fixed
refers to the depreciation of fixed assets of a given period, drawn in
accordance with the stipulated depreciation rate for the purpose of
compensating the wear loss of the fixed assets or the depreciation of fixed
assets calculated in a fictitious way in accordance with the stipulated unified
depreciation rate in the national economic accounting system. It reflects the
value of transfer of the fixed assets in the production of the current period.
The depreciation of fixed assets in various enterprises and institutions
managed as enterprises refers to the depreciation expenses actually drawn. In
government agencies and institutions not managed as enterprises which do not
draw the depreciation expenses, as well as for the houses of residents, the
depreciation of fixed assets is the imputed depreciation, which is calculated
in accordance with the stipulated unified depreciation rate. In principle, the
depreciation of fixed assets should be calculated on the basis of the
re-purchased value of the fixed assets. However, there is no actual condition
to re-evaluate all the fixed assets in
Operating Surplus refers to the balance of the value added created by the resident units after deducting the labourers remuneration, net taxes on production and the depreciation of fixed assets. It is equivalent to the business profit of the enterprises plus subsidies on production, but the wages and welfare expenses paid from the profits should be deducted.
GDP by Expenditure Approach refers to the method of measuring the final results of production activities of a country (region) during a given period from the perspective of final use. It includes final consumption, gross capital formation and net export of goods and services, i.e.:
GDP by expenditure approach = final consumption + gross capital formation + net export of goods and services
Final Consumption refers to the total expenditure of resident units for purchases of goods and services from domestic economic territory and abroad to meet the requirements of material, cultural and spiritual life. It excludes the expenditure of non-resident units on consumption in the economic territory of the country. The final consumption is broken down into household consumption and government consumption.
Households Consumption refers to the total expenditure of resident households on the final consumption of goods and services. In addition to the consumption of goods and services bought by the households directly with money, the households consumption also includes expenditure on goods and services obtained by the households in other ways, i.e. the so-called imputed consumption expenditure, which includes the following: (a) the goods and services provided to the households by the employer in the form of payment in kind and transfer in kind; (b) goods and services produced and consumed by the households themselves, in which the services refer only to the owner-occupied housing and domestic and individual services provided by the paid household workers; (c) financial intermediate services provided by financial institutions; (d) insurance services provided by insurance companies.
Government Consumption refers to the expenditure on the consumption of the public services provided by the government to the whole society and the net expenditure on the goods and services provided by the government to the households free of charge or at low prices. The former equals to the output value of the government services minus the value of operating income obtained by the government departments. The latter equals to the market value of the goods and services provided by the government free of charge or at low prices to the households minus the value received by the government from the households.
Gross Capital Formation refers to the fixed assets acquired minus those disposed of and the net value of inventory, including the gross fixed capital formation and the increase in inventory.
Gross Fixed Capital Formation refers to the value of fixed assets acquired minus those disposals of during a given period. Fixed assets are the assets produced through production activities with specified unit value which could be used for over one year, excluding natural assets. Gross fixed capital formation can be categorized into total tangible capital formation and total intangible capital formation. The total tangible capital formation include the value of the construction projects, installation projects completed and the equipment, apparatus and instruments purchased as well as the value of land improved, the value of draught animals, breeding stock, animals for milk, for wool and for recreational purpose, and the newly increased forest with economic value during a given period. The total intangible capital formation includes the prospecting of minerals, the acquisition of computer software minus the disposal of them.
Increase in Inventory refers to the market value of the change in inventory of resident units during a given period, i.e. the difference of value between the beginning and the end of the period minus the current gains due to the change in prices. The increase in inventory can be positive or negative. A positive value indicates the increase in inventory while a negative value indicates the decrease in inventory. The inventory includes the raw materials, fuels and reserve materials purchased by the production units as well as the inventory of finished products, semi-finished products, work-in-progress, etc.
Net Export of Goods and Services refers to the difference of the exports of goods and services minus the imports of goods and services. The imports include the value of various goods and services sold or gratuitously transferred by the resident units to the non-resident units. The imports include the value of various goods and services purchased or gratuitously acquired by the resident units from the non-resident units. Because the provision of services and the use of them happen simultaneously, the acquisition of services by the resident units from abroad is usually treated as import while the acquisition of services by non-resident units in this country is usually treated as export. The export and import of goods are calculated at FOB.