China Industrial Productivity (CIP) Database Set up, progress, challenges, and relations with

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China Industrial Productivity
(CIP) Database
Set up, progress, challenges, and relations with
the world KLEMS
Harry X. Wu
IER, Hitotsubashi University, Tokyo
RIETI/Hi-Stat International Workshop
Tokyo, October 22, 2010
In this presentation…
p
„
„
„
„
„
About the CIP project
Relations with the World KLEMS
Connections with the previous work
P
Progress
so far
f
Challenges
g ahead
The CIP Plan
An IER/Hitotsubashi-RIETI joint research project.
Th currentt round
The
d off the
th project
j t is
i for
f the
th period
i d 2010-12.
2010 12
It aims to construct conceptually standard and methodologically
KLEMS-compatible
p
database that is eventually
y open
p to the
public.
At the same time, it engages world-wide researchers in policyoriented production function analysis on the post
oriented,
post-reform
reform
Chinese economy at industry level, as well as international
comparisons. In particular:
‰
‰
‰
‰
„
„
„
The role of government in resource reallocation compared with the
market from a productivity perspective
The productivity effect of different reform models, shock therapy
versus gradualist
Dynamic comparative advantage from a productivity perspective
The CIP Plan…
Features of the CIP database
„
‰
Period covered: 1980/85
1980/85-2010
2010
‰
Industry classification: Based on CSIC2002 (ISIC v3,
compatible) linked back to CSIC1972
compatible),
CSIC1972, CSIC1985 and
CSIC1994, fully reconcilable with the Chinese I/O tables
‰
Regional break down: rural vs urban (for the recent
decade only)
‰
Legal form (ownership type) break down: state, domestic
non-state and foreign-invested enterprises (for the recent
decade only)
The CIP Plan…
Features of the CIP database
„
‰
Labor data: numbers employed; adjusted for national
totals; converted for hours worked; and adjusted for
quality
lit change
h
b
by llabor
b compensation
ti
‰
Capital data: alternative investment flows to official
statistics; breakdown by structures (residential to be
removed) and equipment; deflated by re-constructed
industry-specific
y p
deflators; depreciated
p
by
y alternative
rates; adjusted for quality change by user costs
‰
Output data: GVO and GVA based on available national
accounts and input-output tables; adjusted for
inconsistency with industry accounts; deflated by industryspecific output and input (if possible) deflators
The CIP and the World KLEMS
The CIP project is conceptually and methodologically
in line with the system of the world KLEMS
Th results
The
lt off the
th CIP are aimed
i d tto b
be a coherent
h
t
part of the KLEMS
International collaborations
‰
‰
‰
„
„
„
„
GGDC, aiming at setting up some regular joint program on
both data and analytical
y
studies
The productivity program of TCB China Center
The NBS-TCB joint productivity program
Together with JIP and KIP to develop links with other major
Asian economies to enhance the work towards Asian KLEMS
Links to myy previous
p
work
featured by …
‰
‰
‰
‰
39 (grouped to 24) industries of the industrial sector
(mining manufacturing and utilities as the sub
(mining,
subsectors) for the period 1949/52-2000/05
Covering only enterprises at/above the “designated
designated
size” (previously “township level),
Leaving those below the “size”
size and outside the
regular “reporting-registration system” as a residual
Adjusted
j
for CSIC1994-CSIC2002 ((no change
g for the
industrial sector) (Chart)
Links to my previous work…
‰
‰
‰
Employment series, reconstructed and
conceptually adjusted to international standards in
numbers,
b
h
hours, compensation,
ti
and
d quality
lit ((see
the following table)
Adj t d ffor structural
Adjusted
t t lb
breaks
k ((see th
the ffollowing
ll i
chart)
… in
i parallel
ll l tto a “tid
“tidy version”
i ” off th
the NBS series
i
on numbers employed
Links to my previous work…
‰
‰
‰
Industry capital stock is estimated with a novel
approach that derives flows from the official stock data
at historical costs
costs, breaks down structures and
equipment, constructs the initial stock, measures price
change
g and depreciation
p
The new investment flow-based stock estimates are
made in parallel to those using the official investment
statistics for comparison (see the following chart)
However, official investment indicator is not based on
the national accounts concept of fixed capital
formation, FCF
Estimated Net Capital Stock by Industry:
Wu (K1/Blue) vs Official (K2/Red) (1985=100)
1
2
1600
1400
1200
3
4
3000
400
180
2500
350
160
2000
140
300
2000
5
2400
1600
120
1000
250
1500
100
800
1200
200
80
1000
600
150
500
400
0
200
86
88
90
92
94
96
K1_LEVEL
98
00
02
04
88
90
K2_LEVEL
92
94
96
K1_LEVEL
6
98
00
02
04
20
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
7
600
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
8
2000
500
400
40
50
86
800
60
100
00
02
04
350
200
300
80
40
0
96
K1_LEVEL
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
11
98
00
02
04
02
04
02
04
02
04
02
04
50
0
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
12
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
1600
4000
1200
1400
3600
98
00
02
04
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
14
3200
1200
96
K1_LEVEL
13
1400
1000
00
100
100
400
94
98
K2_LEVEL
150
800
92
96
120
200
90
94
200
200
88
92
250
160
300
86
90
10
240
1200
0
88
K1_LEVEL
300
400
100
86
K2_LEVEL
9
400
1600
98
98
00
K2_LEVEL
15
1000
2000
800
1600
600
1200
400
800
200
400
2800
1000
800
2400
800
2000
600
600
400
1600
400
1200
200
200
800
0
0
400
86
88
90
92
94
96
K1_LEVEL
98
00
02
04
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
16
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
17
4000
96
K1_LEVEL
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
18
600
1600
500
1400
400
1200
96
K1_LEVEL
98
00
02
04
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
19
98
00
K2_LEVEL
20
2000
1200
3600
2800
1000
1600
3200
800
1200
2400
300
1000
200
800
100
600
600
2000
800
1600
400
1200
400
200
800
0
400
86
88
90
92
94
96
K1_LEVEL
98
00
02
04
400
86
88
90
K2_LEVEL
92
94
96
K1_LEVEL
21
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
K1_LEVEL
22
2400
96
98
00
02
04
0
86
88
90
K2_LEVEL
92
94
K1_LEVEL
23
200
500
160
400
120
300
80
200
40
100
0
0
96
98
00
02
04
K2_LEVEL
86
88
90
92
94
96
K1_LEVEL
98
24
16000
14000
2000
12000
1600
Different
10000
1200
8000
6000
800
400
Similar
4000
2000
0
86
88
90
92
94
K1_LEVEL
96
98
00
K2_LEVEL
02
04
86
88
90
92
94
K1_LEVEL
96
98
00
K2_LEVEL
02
04
0
86
88
90
92
94
K1_LEVEL
96
98
00
K2_LEVEL
02
04
86
88
90
92
94
K1_LEVEL
96
98
00
K2_LEVEL
02
04
00
K2_LEVEL
Progress so far…
‰
‰
‰
‰
‰
Have revisited
H
i i d allll conceptuall and
d classification
l
ifi i problems
bl
iin
employment and investment in Chinese statistics
Investigated
g
all sources of annual series and now moving
g to all
census-based data aiming to use all available information to fill
data gaps and make the constructed data consistent
Services have been the focus of the CIP so far in basic data
construction
A significant progress has been made in estimating industries of
below size and outside the system (self employed) for the
industrial sector
A significant progress has been made in constructing national
accounts-consistent GVO and GVA at nominal prices using the
GGDC SUTRAS program
Challenges
g in the CIP…
„
How to deal with the industry level data
inconsistency with the national accounts?
(see the following chart)
‰
‰
‰
Assuming
gag
growth along
g the p
past trend?
Imposing fixed ratios from the most recent
census?
Or something else that is more coherent with the
I/O tables?
The national accounts are blown up…
p
1.20
National industrial
GDP & employment
!
1.00
?
0.80
0.60
0.40
Socialist
market
economy
0.20
"Designated
size"
size
introduced
2004
Census
Ratio of "above-size" (value added)
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0 00
0.00
Ratio of "above-size" (employment)
Challenges
g in the CIP…
„
„
„
On the other hand, how to deal with the likely
exaggeration of the national accounts in
output?
Stick to the national accounts or produce two
alternative databases in parallel?
See the follo
following
ing chart
chart…
Industrial output has been exaggerated?
gg
Challenges
g in the CIP…
‰
Capital: serious inconsistencies between
„
„
„
‰
fixed
fi
d assett iinvestment
t
t (FAI) collected
ll t d and
d reported
t d by
b NDRC
(the modern form of the old planning commission) that
includes land transaction fees (the total FAI is about 20-30%
higher than FCF, apparently adjusted by NBS)
fixed capital formation (FCF) – national accounts concept, but
there is still substantial mis-categorization
mis categorization of inventory as fixed
capital formation as admitted by NBS
(implicit) actual increase in the capital stock at the industry
l
level
l ((production
d ti accounts
t as iin accounting
ti b
book)
k)
Currently, for the industrial sector investment flows are
Currently
derived from the production accounts. If this is
acceptable,
p
how about services?
Challenges
g in the CIP…
‰
‰
‰
‰
Employment:
p y
serious inconsistency
y between annual statistics
collected through the regular reporting system and by the
population census (and population annual sample surveys),
which use different concepts of employment
The regular system collects data mainly from the formal sector
with stable employment that is monitored by the authorities,
whereas the census and population sample surveys also cover
employment from informal sectors, temporary workers, nonregistered self-employed
An astonishing structural break in employment appeared in 1990
(see the growth rate in the chart) that could not be justifiable by
fundamental forces in the economy
The structural break in employment series
18.0
Annual % change
16 0
16.0
14.0
12.0
GDP
10.0
W ki age population
Working
l ti
8.0
NBS employment
6.0
4.0
20
2.0
200
08
200
05
200
02
199
99
199
96
199
93
199
90
198
87
198
84
198
81
197
78
0.0
A preliminary result for the aggregate economy after
all adjustments.
Implications? TFP gain or lost is likely due to
policy regime shift shocks and growth in general is
i
investment
d
driven
i
Input Contribution to China's Annual Economic Growth (%)
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
TFP
2.0
Physical Capital
1.0
Human Capital
p
0.0
Labor
‐1.0
‐2.0
‐3.0
‐4.0
40
2002‐08
1992‐01
1985‐91
1978‐84
1972‐77
1966‐71
1958‐65
1952‐57
‐5.0
Comments or ideas?
Thank You!
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