Industrial Classification of National Economy

The new Industrial Classification of National Economy (GB/T 4754-2002) is introduced starting from the compilation of 2003 annual statistics. The revision, based on the 1994 classification, was organized by the National Bureau of Statistics taking into consideration of the International Standards of the Industrial Classification of All Economic Activities (ISIC/Rev.3) of the United Nations. The new Classification was promulgated by the National Administration of Quality Supervision, Inspection and Quarantine on May 10, 2002. The revised version of the Industrial Classification of the National Economy (GB/T 4754-2002) is composed of 20 major divisions, 95 divisions, 396 major groups and 913 groups, of which 4 major divisions, 3 divisions, 28 major groups and 67 groups are new respectively.

Category of Three Industries

Three industries are categorized according to the standard of the Industrial Classification of the National Economy (GB/T 4754-2002).

Primary Industry includes agriculture, forestry, animal husbandry and fishery.

Secondary Industry includes industry (minerals mining, manufacturing, production and supply of electricity, gas and water) and construction.

Tertiary Industry includes all other industries not included in primary or secondary industry, including transportation, storage, post services; information transmitting, computer services and software; wholesale and retail trade; accommodation and catering services; finance; real estate; leasing and business services; scientific research, technical services and geological prospecting; management for water conservancy, environment and public facilities; resident services and other social services; education; health care, social security and social welfare; culture, sports and recreational services; public management and social organizations , international organizations and so on.

Registration Status of Enterprises

Enterprises are classified into 3 categories, namely domestic-funded enterprises, enterprises with investment from Hong Kong, Macau and Taiwan, and enterprises with foreign investment, according to the registration status of an enterprise in industrial and commercial administration agencies. Domestic-funded enterprises include State-owned enterprises, collective-owned enterprises, cooperative enterprises, joint ownership enterprises, limited liability corporations, share-holding corporations Ltd., private enterprises and other enterprises. Included in the enterprises with investment from Hong Kong, Macau and Taiwan and enterprises with foreign investment are joint-venture enterprises, cooperative enterprises, sole investment enterprises and share-holding corporations Ltd. For government agencies, institutions and social organizations which are not registered in industrial and commercial administration agencies, they are classified mainly by their sources of funding and manner of management.

State-owned Enterprisesrefer to non-corporation economic units where the entire assets are owned by the state and which have registered in accordance with the Regulation of the People’s Republic of China on the Management of Registration of Corporate Enterprises. Excluded from this category are sole state-funded corporations in the limited liability corporations. Excluded from this category are enterprises with exclusive investment from state-owned, state-owned cooperative enterprises in the join ownership enterprises.

Collective-owned Enterprisesrefer to economic units where the assets are owned collectively and which have registered in accordance with the Regulation of the People’s Republic of China on the Management of Registration of Corporate Enterprises. Excluded from this category are collective-owned and collective-owned cooperative enterprises in joint ownership enterprises, excluded cooperative enterprises.

Cooperative Enterprisesrefer to a form of collective economic units (enterprises) where capitals come mainly from employees as their shares, with certain proportion of capital from the outside, where production is organized on the basis of independent operation, independent accounting for profits and losses, joint work, democratic management, and a distribution system that integrates remuneration according to work with divided according to capital share.

Private Enterprisesrefer to profit-making economic units invested and established by natural persons, or controlled by natural persons using employed labour. Included in this category are private limited liability corporations, private share-holding corporations Ltd., private partnership enterprises and private-funded enterprises registered in accordance with the Corporation Law, Partnership Enterprises Law and Interim Regulations on Private Enterprises.

Share-holding Corporations Ltd.refer to economic units registered in accordance with the Regulation of the People’s Republic of China on the Management of Registration of Corporate Enterprises, with total registered capitals divided into equal shares and raised through issuing stocks. Each investor bears limited liability to the corporation depending on the holding of shares, and the corporation bears liability to its debt to the maximum of its total assets.

Limited Liability Corporationsrefer to economic units established with investment from 2-50 investors and registered in accordance with the Regulation of the People’s Republic of China on the Management of Registration of Corporate Enterprises, each investor bearing limited liability to the corporation depending on its share of investment, and the corporation bearing liability to its debt to the maximum of its total assets. Limited liability corporations include exclusive state-funded limited liability corporations and other limited liability corporations.

Sole State-funded Corporationsrefer to limited liability corporations established with exclusive investment from investment institutions or departments authorized by the state.

Other Limited Liability Corporationsrefer to the limited liability corporations other than sole state-funded corporations.

Joint Ownership Enterprisesrefer to economic units established by two or more corporate enterprises or corporate institutions of the same or different ownership, through joint investment on the basis of equality, voluntary participation and mutual benefits. They include state joint ownership enterprises, collective joint ownership enterprises, joint state-collective enterprises, and other joint ownership enterprises.

Other Domestic-funded Enterprisesrefer to domestic-funded economic units other than those mentioned above.

Enterprises with Sole Investment from Hong Kong, Macao and Taiwanrefer to enterprises established in the mainland of China with exclusive investment from investors from Hong Kong, Macao and Taiwan in accordance with the Law of the People’s Republic of China on Foreign-Funded Enterprises and other relevant laws.

Share-holding Corporations Ltd. with Investment from Hong Kong, Macao and Taiwanrefer to share-holding corporations Ltd. established with the approval from the Ministry of Commerce Relations (the Ministry of Foreign Trade and Economic) in line with relevant state regulations, where the share of investment from Hong Kong, Macao or Taiwan business men exceeds 25% of the total registered capital of the corporation. In case, the share of investment from Hong Kong, Macao or Taiwan is less than 25% of the total registered capital, the enterprise is to be classified as domestic-funded share-holding corporation Ltd.

Enterprises with Sole Foreign Investmentrefer to enterprises established in the mainland of China with exclusive investment from foreign investors in accordance with the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises and other relevant laws.

Share-holding Corporations Ltd. with Foreign Investmentrefer to share-holding corporations Ltd. established with the approval from the former Ministry of Foreign Trade and Economic Relations in line with relevant State regulations, where the share of investment from foreign investors exceeds 25% of the total registered capital of the corporation. In case the share of foreign investment is less than 25% of the total registered capital, the enterprise is to be classified as domestic-funded share-holding corporation Ltd.

Government Agencies, Institutions and Social Organizations

are classified into following categories by source of funds and way of management taking reference of the registration status of enterprises.

1. Government agencies include state and party agencies, classified in principle as “state-owned”. There are exceptions, such as supply and marketing cooperatives which are classified as “collective-owned”.

2. Institutions include institutions of various types established with the approval by organization and staffing department of the government, but exclude institutions where enterprise management system is introduced. Institutions are further classified as follows:

(1) Institutions whose main budget is listed in the government budget appropriations or extra-budget funds, or allocated from the budget of their competent government agencies. Such institutions are classified as “state-owned”.

(2) Institutions whose budget mainly comes from collective units. Such institutions are classified as “collective-owned”.

(3) Institutions established by individual (individual partnership), which are classified as “private”.

(4) Institutions other than those mentioned above whose source of budget are not clear. Such institutions are classified by way of management.

3. Social organizations include social organizations established with the approval from the Ministry of Civil Affairs, and organizations that are not covered by social organizations management regulations such as trade unions, women’s federations etc. Social organizations are further classified as follows:

(1) Social organizations that are not covered by social organizations management regulations of the Ministry of Civil Affairs, such as trade unions, women’s federations, communist youth leagues, youth associations, industrial and commerce associations, scientists associations, overseas Chinese associations, etc., foundations and fund management organization established with funds from state, and social organizations whose funds mainly come from the budget of their competent government agencies. Such institutions are classified as “state-owned”.

(2) Social organizations whose budget mainly comes from collective units. Such institutions are classified as “collective-owned”.

(3) Social organizations established by individual (individual partnership), which are classified as “private”.

(4) Social organizations other than those mentioned above whose source of budget is not clear. Such institutions are classified by way of management.

Type of Ownership

refers to enterprises classified as various type of ownership in accordance with registered categories of enterprises after 1998.In which, state-owned economy refer to state-owned enterprises, sole state-funded enterprises, state joint ownership enterprises, collective-owned economy refer to collective-owned enterprises, cooperative enterprises, collective joint ownership enterprises; private economy refer to private enterprises and individual.

The Division Standard of Urban and Rural Areas

According to The Regulation on The Division of Urban and Rural Areas in Statistics of State Department No.60 [2008], The new division standard of Urban and Rural Areas is as follows: Urban Area including city and township. City refers to the residents’ committee and other areas connected with the actual construction of district and municipal government in the districts of city and the city without districts. Township refers to the residents’ committee and other areas connected with the actual construction of district and municipal government outside city zones and other areas. Rural areas refer to the areas besides urban areas defined by the regulation.

Actual Price (current price)

includes all other industries not included in primary or secondary industry, including transport, storage, post services; information transmitting, computer services and software; wholesale and retail trade; accommodation and catering services; finance; real estate; leasing and business services; scientific research, technical services and geological prospecting; management for water conservancy, environment and public facilities; resident services and other social services; education; health care, social security and social welfare; culture, sports and recreational services; public management and social organizations and so on.

Constant Price

refer to prices that are used to remove the factors of price change in calculating economic aggregates, so as to facilitate comparison of aggregates over time. Two methods are used for calculating economic aggregates at constant prices,
a) Multiplying the output of products by their constant prices of certain year; b) Deflation of data at current prices by relevant price index.

Average Annual Growth Rate

shows the average growth rate of social and economic development during a longer period. It can not be directly calculated by chain based growth rate. The relation is:

Average Annual Growth Rate = Average Speed of Development – 1

Average speed of development is the time series average of speed which calculated by chain based. Because the reference bases during the different periods are not same, average speed of development can not be calculated by the general method. Level approach and accumulative approach for calculating average speed of development rate are applied. The “level approach”, or the method of calculating the geometric average, is derived by the formula of geometric average of the chain-based speeds of development, or comparing the level of the last year of the interval with that of the beginning year; the other is called the “accumulative approach” or the “algebraic average”, “equation” method, which is derived by the summation of the actual figure of each year in the interval divided by the figure in the base year. The level approach focuses on the level of the last year, while the accumulative approach emphasizes the aggregate development in the duration.

The average annual growth rates listed in the Yearbook are calculated by the level approach except for the growth rate of investment in fixed assets. The base year is not listed in the duration for which average annual growth rates are computed. For instance, the average annual growth rate of the 43 years since 1949 is shown as the average annual growth rate of 1950-1992 without showing the base year 1949.