About CIP China Industrial Productivity Database and Its

About CIP (China Industrial Productivity Database) and Its Relation with the KLEMS Harry X. Wu IER, Hitotsubashi University, Tokyo The 1 st World KLEMS Conference, Harvard University, August 19 -20, 2010

The CIP Plan q q The current project is for the period 2010 -12 Objective: conceptually standard, consistent classification, and internationally compatible database for production function analysis of the Chinese economy at industry level

The CIP Plan… q Institutional set up of the CIP n n IER/Hitotsubashi-RIETI Asian KLEMS TCB China Center NBS-TCB joint program

The CIP Plan… Features of the CIP database n q q q Period to be covered: 1980 -2010 Industry classification: Based on CSIC 2002, linked to CSIC 1972, CSIC 1985 and CSIC 1994, reconcilable with the World KLEMS Labor: numbers employed, adjusted for hours worked; adjusted for quality by the standard user cost approach; matching the adjusted input-output tables

The CIP Plan… q q Capital: decomposed into production structures, residential structures and equipment; deflated by re-constructed industry specific deflators; adjusted for quality by the standard user costs approach; matching the adjusted input-output tables Output: based on input-output tables, adjusted for inconsistency with industry-level input accounts; deflated by industry-specific output deflators

Links to my previous work featured by … q 39 (grouped to 24) industries of the industrial sector from 1949/52 -2000/05, satisfying CSIC 1994 -CSIC 2002 (Chart)

Links to my previous work… q q Employment series, reconstructed and conceptually adjusted to international standards in numbers, hours, compensation, and quality (Table) (Chart), … in parallel to a tidied version of NBS series on numbers employed

Links to my previous work… q Capital stock series, estimated with a novel approach in deriving flows, constructing initial stock, measuring prices and determining depreciation function

Links to my previous work… q Output series, reconstructed to tackle problems in levels, prices and inconsistencies, in parallel to a tidied version of NBS series (Chart 2)

Output problems?

Key problems to be solved in CIP q q Extending my approach on industries to services, construction and agriculture Establishing employment and capital accounts that match, and logically coherent with, the national accounts

Key problems to be solved in CIP… q q q Employment: serious inconsistency between annual statistics through the reporting system and population census (and its annual sample surveys) appeared in 1990, and further in 2002 onwards (Chart) Capital: serious inconsistencies between fixed asset investment, fixed capital formation and actual increase in capital stock at industry level Output: serious inconsistencies between industrial statistics and national accounts (sum up of part of enterprises is more than the national accounts in value added) (Chart)

The structural break in employment series

The national accounts are blown up…