Explanatory Notes on Main Statistical Indicators

Investment in Fixed Assets

Total Investment in Fixed Assets in the Whole Country refers to the volume of activities in construction and purchases of fixed assets and related fees, expressed in monetary terms. It is a comprehensive indicator which shows the size, structure and growth of the investment in fixed assets, providing basis for observing the progress of construction projects and evaluating results of investment. Total investment in fixed assets in the whole country includes, by type of ownership, the investment by the state-owned units, collective units, individuals, joint ownership units, share-holding units, as well as investment by businessmen from foreign countries and from Hong Kong, Macau and Taiwan, and by other units. According to China's current management system, the investment in fixed assets is classified into the following four parts: investment in capital construction, investment in innovation, investment in real estates development and other investment in fixed assets.

Investment in Capital Construction Capital construction refers to the new construction projects or extension projects and the related activities of the enterprises, institutions or administrative units mainly for the purpose of expanding production capacity (or improving project efficiency), covering only projects each with a total investment of 500,000 RMB yuan and over. It includes: (1) projects listed in the capital construction plan of the current year of the central government and the local governments at various levels as well as the projects, though not listed in the capital construction plan of the current year, but continued to be constructed in this year, using the investment listed in the plan of capital construction of previous years and carried forward to this year (also using the equipment and materials kept in stock of the capital construction); (2) new construction projects arranged both in the plan of capital construction and the plan of innovation; extension projects with the newly increased production capacity (or project efficiency) up to the standard of a large and medium-sized project; and the projects of moving the whole factory to a new site so as to improve the distribution of productive forces; (3) new construction projects, extension projects or restoration projects with the total investment of 500,000 RMB yuan and over by the state-owned units, though listed neither in the plan of capital construction nor in the plan of innovation; the projects in the state-owned units of moving the whole factory to a new site so as to improve the distribution of productive forces; and the projects of building additional business houses by the administrative units and institutions and building welfare facilities by the administrative units.

Investment in Innovation Innovation refers in general to the technological innovation of the original facilities (including renewal of fixed assets) by the enterprises and institutions as well as the corresponding supplementary projects for production or welfare facilities and the related activities, covering only projects each with a total investment of 500,000 RMB yuan and over. It includes: (1) projects listed in the innovation plan of the current year of the central government and the local governments at various levels as well as the projects, though not listed in the innovation plan of the current year, but continued to be constructed in this year, using the investment listed in the plan of innovation of previous years and carried forward to this year; (2) projects of technological innovation or renewal of the original facilities, arranged both in the plan of innovation and in the plan of capital construction; extension projects (main workshops or a branch of the factory) with the newly increased production capacity (or project efficiency) not up to the standard of a large and medium-sized project; and the projects of moving the whole factory to a new site so as to meet the requirements of urban environmental protection or safe production; (3) projects of reconstruction or technological innovation with the total investment of 500,000 RMB yuan and over by the state-owned units, though listed neither in the plan of capital construction nor in the plan of innovation; the projects in the state-owned units of moving the whole factory to a new site so as to meet the requirements of urban environmental protection or safe production.

Investment in Real Estate Development It includes the investment by the real estate development companies, commercial buildings construction companies and other real estate development units of various types of ownership in the construction of house buildings, such as residential buildings, factory buildings, warehouses, hotels, guesthouses, holiday villages, office buildings, and the complementary service facilities and land development projects, such as roads, water supply, water drainage, power supply, heating, telecommunications, land leveling and other projects of infrastructure. It excludes the activities in simple land transactions.

Other Investment in Fixed Assets refers to the construction and purchases of fixed assets with an investment of over 500,000 yuan which are not listed in the investment in capital construction, investment in innovation and investment in real estate development, as well as urban private housing projects and investment in fixed assets by enterprises, institutions and individuals in rural areas. It includes:

1) The following projects of the state-owned units with the total planned (or actually needed) investment of over 500,000 yuan, which are not included in the plan of capital construction and the plan of innovation: (1) projects of oil fields maintenance and exploitation with the oil fields maintenance funds and petroleum development funds; (2) opening and extending projects with the maintenance funds in coal, ore and other mining enterprises and logging enterprises; (3) project of reconstruction of the original highways and bridges with the highway maintenance funds in the department of communication; (4) projects of construction of warehouses with the funds of simple construction in the commercial department.

2) The investment in fixed assets by urban collective units: refer to projects of construction and purchases of fixed assets with the planned total investment of 500,000 yuan and over by all collective units in areas under the jurisdiction of cities and county towns (excluding investment by collective units under township enterprise administration offices).

3) The projects of construction and purchases of fixed assets by the enterprises, institutions (including urban private enterprises or institutions) or individuals other than those mentioned above with total investment of 500,000 yuan and over, which are not included in the plan of capital construction and the plan of innovation. For individual investment, only the investment in non-housing projects is to be included.

4) The private investment in housing construction in the urban areas and in industrial and mining areas: including all private housing construction under the jurisdiction of cities, county towns and industrial and mining areas, no matter whether the owner of the house is registered as the permanent resident in the locality or not.

5) The investment in rural areas: including investment in fixed assets by enterprises, institutions and individuals in the rural areas.

Sources of Funds for Investment in Fixed Assets include fund from state budget, domestic loans, foreign investment, self-raised funds, and others depending on the source of investment.

(1) Fund from state budget consists of budgetary appropriation and loans from state budget. More specifically, it includes, from the budget of the central government, capital construction fund (operation fund and non-operational fund), special expenses (e.g. expenses on substituting petroleum with coal), loans from repayment, discount fund, expenses on innovation and trial production of new products, expenses on urban construction, expenses on temporary construction by trade departments, development fund for less developed areas, as well as local budgetary fund transferred from the central budget.

(2) Domestic loans refer to loans of various forms borrowed by investing units from banks and non-bank financial institutions during the reference period for the purpose of investment in fixed assets, including loans issued by banks from their self-owned funds and deposit, loans appropriated by higher responsible authorities, special loans by government (including loan for substituting petroleum with coal, special loan for reform-through-labour coal mines), loans arranged by local government from special funds, domestic reserve loan, and working loan, etc..

(3) Foreign Investment refers to foreign funds received during the reference period for the construction and purchase of investment in fixed assets (covering equipment, materials and technology), including foreign borrowings (loans from foreign governments and international financial institutions, export credit, commercial loans from foreign banks, issue of bonds and stocks overseas), foreign direct investment and other foreign investment. Excluded in this category are capitals in foreign exchanges owned by China (foreign exchanges owned by the central and local governments, foreign exchanges retained by enterprises, foreign exchanges by enterprises through regulating mechanism, loans in foreign exchanges issued by the Bank of China with its own fund, etc.). In calculating the utilization of foreign capitals, foreign currencies are converted into Chinese Renminbi applying the current exchange rate when the foreign capitals are actually used.

(4) Self-raised funds refer to extra-budgetary funds for investment in fixed assets received by investing units from central government ministries, local governments, enterprises and institutions, including their self-raised funds.

(5) Others refer to funds for investment in fixed assets received from the sources other than those listed above, including capitals raised through issuing bonds by enterprises or financial institutions, funds raised from individuals and through donations, and funds transferred from other units.

Investment in Fixed Assets by Sector The classification of construction projects by sector is determined by the major products or the purpose of the projects when they are put into production or use, and by the nature of their social economic activities. The investment in capital construction is classified into different sectors of the national economy by the nature of construction projects, while investment in innovation and other investment are classified according to the sector to which the whole enterprise or institution belongs. In general, one project or one enterprise or institution can only be classified into one sector. In order to reflect more accurately the relation among various sectors, the branch factories of an integrated complex are classified into different sectors according to the economic activities of the branch factories.

Investment in Fixed Assets by Type of Construction The construction projects in general can be classified, by the type of construction, into new construction, expansion, reconstruction, moving and restoration. However, investment by type of construction is not applied to investment by real-estate development units, investment in rural areas and investment in housing by urban individuals. In capital construction, the type of construction is determined by the nature of the project. In investment in innovation, in other investment by state-owned units and investment by collective-owned units, the type of construction is determined by the condition of the whole enterprise or institutions.

(1) New construction in general refers to newly constructed enterprises, institutions, administrative agencies or independent projects from scratch. Construction in the existing enterprises, institutions or agencies is not considered as new construction. In case the assets of the existing unit is quite small, and the value of newly added fixed assets exceeds the original value of assets by three times, the expansion will be considered as new construction.

(2) Expansion refers to construction of new major production workshop, branch factory or independent production line within a factory or in other locations, for the purpose of increasing the production capacity (or improving efficiency) of the original products. Newly constructed houses for the operation of institutions and administrative organizations (such as the newly constructed buildings for teaching in schools, buildings for clinics or wards in hospitals, etc.) are also classified as expansion.

Also included in the expansion are investments by existing enterprises or institutions in building major production line(s) or branch factory(ies) along with some work on innovation, for the purpose of expending the production capacity of original products or producing new products.

(3) Reconstruction refers to innovation or technical transformation of the existing facilities (including auxiliary production equipment and welfare facilities), without building major new workshops or branch factories. Also considered as reconstruction is the construction of new workshops by the existing enterprises or institutions for improving the existing production capacity (improving or changing the variety of products to meet the market demand), rather than increasing the designed capacity of the main products.

Investment in Fixed Assets by Structure By their contents, investment activities are classified into 3 categories, i.e. construction and installation, purchase of equipment and instrument, and other expenses.

(1) Construction and installation (work volume of construction and installation) refers to the construction of various houses and buildings and installation of various kinds of equipment and instruments. They include construction of various houses; equipment foundations, industrial kilns and stoves, and metal structure work; preparation works for project construction, and clearing up works post project construction; pavement of railways and roads, drilling of mines and putting up of oil pipes; construction of projects of water conservancy; construction of underground air-raid shelters and construction of other special projects; value of equipment for heating, sanitation, ventilation, lighting, gas, painting, etc. that are covered by the budget of housing projects; laying out of various pipelines (for steam, compressed air, petroleum, tap water and sewage) and lines for electric power and for communications; installation of various machinery equipment, testing operation for pre-testing the quality of installation projects, and land and other development work conducted by real estate developers for commercial housing. The value of equipment installed is not included in the value of installation projects.

(2) Purchase of equipment and instruments refers to the total value of equipment, tools, and instruments purchased or self-produced which come up to standards for fixed assets by the construction units or investing enterprises or institutions. Equipment, tools and instruments purchased or self-produced for new workshops by newly established or expanded units are categorized as "purchase of equipment and instruments" no matter whether they come up to the standards for fixed assets.

(3) Other expenses refer to expenses occurring during the construction or purchase of fixed assets other than those mentioned above.

Capital Construction Projects by Size The classification of size of capital construction projects should be determined according to the total scale or total investment set in the approved construction plan by higher responsible authorities or in the tentative design, otherwise according to the total scale or total investment set in the current capital construction plan of the state, provinces, autonomous regions, and municipalities directly under central government. Industrial projects which produce unitary products are classified according to its design capacity of products; projects which produce multi-products are classified by the design capacity of the major product or by the total planned investment. Standards for the Classification of Construction Projects into large, medium-sized and small ones issued by the government are the base for size division of construction projects, which was revised five times in 1958, 1962, 1972, 1977, and 1979 respectively and therefore, data on projects by size are not entirely comparable from year to year.

Projects under Construction refer to projects with construction and installation activities undertaken in the reference period. All projects that have construction activities undertaken during the reference period are reported as projects under construction irrespective of the length of construction work. The number of projects under construction can reflect the actual size of investment in fixed assets during a given period, and when compared with the number of projects completed and put into use during the same period, it demonstrates the results of investment in fixed assets. Depending on the nature of construction activities, projects under construction can also be classified into projects under construction in current year, winding-up projects in current year and stopped or suspended projects in previous years (with preservation work in current year).

Projects Completed and Put into Use Industrial projects refer to the major projects and accessory facilities completed which result in forming production capacity and have been checked and accepted while the living and welfare facilities have been completed and can ensure normal production and formally put into production. Non-industrial projects refer to the major projects and accessory facilities completed which possess the designed capacity and have been checked, accepted and formally put into production.

Newly Increased Production Capacity (or Project Efficiency) refers to the increase of designed capacity (or project efficiency) through investment in fixed assets, which reflects the accomplishment of investment in fixed assets in kind and serves as important basis for evaluating the economic efficiency of investment.

The newly increased production capacity (project efficiency) are usually expressed in one of the following forms:

(1) output of products, i.e. the output that the project can produce during a given period (usually a year). For instance, the capacity in coal mining is expressed in 10,000 tons/year, the capacity in producing chemical pesticides expressed in ton/year, the capacity in producing tractors in tractor/year, etc. For some chemical products where the effective contents differ significantly, the production capacity is expressed as the designed effective content equivalent, such as in the case of sulphuric acid, soda ash, caustic soda, etc;

(2) raw materials processing capacity, i.e. the volume of raw materials that could be processed by the project per day (or per hour), such as tons of materials processed per day by a sugar refining project or edible vegetable oil project, or tons of urban sewage processed per day;

(3) number or capacity of major equipment increased, such as number of cotton or silk looms increased, wool spindles increased, or capacity (in kilowatts) of power generators increased;

(4) saved raw materials, fuels or power, which are mainly used for the efficiency of innovation and transformation projects; and

(5) physical measures (volume, capacity, area, and length) of construction, which is typical for non-industrial projects, for instance, the length of new railways or highways, the capacity of reservoirs, the floor space of housing projects, capacity for new students in schools or beds in hospitals, areas under new irrigation project, etc.

Features of projects sometimes call for combined use of two or more measurement to reflect the increased production capacity (or project efficiency), for instance, the new capacity for the production of internal combustion engines are expressed in sets per year and kilowatts per year simultaneously.

To standardize the nomenclature and unit of measurement for new production capacity (or project efficiency), the National Bureau of Statistics has developed Nomenclature for New Production Capacity (Project Efficiency) and Nomenclature for Saving Raw Materials, Fuels and Power. All reporting units with investment activities are required to follow these two nomenclatures in reporting statistics on new production capacity (project efficiency).

Floor Space of Buildings under Construction and Completed refers to total floor space of the horizontal section of outer walls above the plinth of the building, including the effective area and the area occupied by the structure. This indicator is one of the important indicators in physical terms to reflect the scale and accomplishment of the construction industry, and important basis for monitoring the progress, calculating the cost, analyzing the efficiency and studying the supply of building materials in relation with the construction projects.

Floor Space of Residential Buildings refers to the floor space of the residential buildings among the total space of buildings under construction or completed.

Floor Space under Construction refers to total floor space of all buildings under construction during the reference period, including floor space of newly started buildings during the reference period, floor space of construction extended from the previous period to the current period, and floor space of construction suspended during the previous period and resumed in the current period. Floor space of construction completed in the current period, and floor space of construction started and then suspended in the current period are also included in the floor space under construction of the current year.

Floor Space of Buildings Completed refers to the floor space of all buildings completed in the reference period, which have been appraised and accepted (or come up to the designed standards) and have been transferred to the owners for use.

Completion Rate of Floor Space of Buildings refers to the ratio of the floor space of buildings completed in certain period of time to the floor space of buildings under construction in the same period. This indicator reflects the investment result from the perspective of the speed of construction.

Newly Increased Fixed Assets refer to the newly increased value of fixed assets, constructed or purchased, that have been transferred to the investors. This is an indicator that demonstrates the results of investment in fixed assets in monetary terms, and an important indicator to reflect the speed of construction and to calculate the efficiency of investment.

Rate of Construction Projects Completed and Put into Use refers to the ratio of the number of construction projects completed and put into use in certain period of time to the number of projects under construction in the same period. This reflects the investment efficiency from the perspective of the speed of projects construction.

Rate of Projects of Fixed Assets Completed and Put into Operation refers to the ratio of the newly increased fixed assets to the total investment made in the same period. This is a comprehensive indicator reflecting the speed of the employment of fixed assets and the investment efficiency at the macro-level. As the newly increase fixed assets is the result of a long period while the investment is completed in the current year, this indicator is expected to be used to reflect the employment of fixed assets over a long period of time.

Number of Flats in Completed Residential Buildings refers to total number of flats completed during the reference period, appraised and accepted as meeting the standards for living, and transferred for use. A flat includes separate kitchen and bathroom, several bedrooms and corridor, suitable for one household. This indicator reflects the degree of industrialization of the residential building construction, the process of urbanization and the improvement of the living standard of people.

Villas, High-Grade Apartments refers to commercial houses whose construction costs and marketing prices are significantly higher than ordinary housing. Villas are independent structures generally located in the suburbs; high-grade apartments are multi-story buildings located in elegant urban neighborhoods. Criteria for villas and high-grade apartments include: 1) projects for the construction of villas or high-grade apartments have to be approved by competent departments in charge of real estate development and investment plans, and 2) prices for projects on villas or high-grade apartments are higher by over 100% compared with the average prices of ordinary commercial housing projects in similar location. This indicator helps to analyze the investment structure of the real estate industry and the demand and supply of housing for high-income households.

Economically Affordable Housing refers to housing constructed according to the state plan for economically affordable housing. Houses of this category featured in low cost in construction and low prices, and therefore are affordable to mid-income or low income households. Economically affordable housing projects are developed by real estate companies under the state investment plan, with the land provided through government allocation or tendering procedures. Developers are exempted from land utilization fees and enjoy another 50% exemption of all other legitimate fees, while their profits are limited to less than 3%, and the completed houses are sold under the government-guided prices. This indicator helps to analyze the investment structure of the real estate industry and the demand and supply of housing for mid or low income households.