Industry refers to the material production sector which is engaged in extraction of natural resources and processing and repr

Industry

Industry refers to the material production sector which is engaged in extraction of natural resources and processing and reprocessing of minerals and agricultural products, including (1) extraction of natural resources, such as mining, salt production (but not including hunting and fishing); (2) processing and reprocessing of farm and sideline produces, such as rice husking, flour milling, wine making, oil pressing, silk reeling, spinning and weaving, and leather making; (3) manufacture of industrial products, such as steel making, iron smelting, chemicals manufacturing, petroleum processing, machine building, timber processing; water and gas production and electricity generation and supply; (4)repairing of industrial products such as the repairing of machinery and means of transport (including cars).

Prior to 1984, the rural industry run by villages and cooperative organizations under village was classified into agriculture. Since 1984, it has been grouped into industry.

Units of industrial statistics survey corporate industrial enterprises with independent accounting system.

Corporate industrial enterprises with independent accounting system refer to enterprises engaging in industrial production activities, which meet the following requirements: ＫThey are established legally, having their own names, organizations, location, able to take civil liability; ＬThey possess and use their assets independently, assume liabilities, and are entitled to sign contracts with other units; ＭThey are financially independent and compile their own balance sheets.

Enterprises covered in the industrial statistics in the Yearbook include following categories by their registration:

State-owned Enterprises refer to industrial enterprises where the means of production or income are owned by the state. Joint state-private industries and private industries, which existed before 1957, have been transformed into state industries. Statistics on these enterprises has been included in the state-owned industries since 1957 when separation of data was no longer necessary.

Collective-owned Enterprises refer to industrial enterprises where the means of production are owned collectively, including urban and rural enterprises invested by collectives and some enterprises which were formerly owned privately but have been registered in industrial and commercial administration agency as collective units through raising fund from the public.

Share-holding Cooperative Enterprises refer to economic units set up on cooperative basis, with funding partly from members of the enterprise and partly from outside investment, where the operation and management is decided by the members who also participate in the production, and the distribution of income is based both on work (labour input) and on shares (capital input).

Joint-operation enterprises refer to economic units that are established by joint investment by two or more corporate enterprises or institutions of the same or different types of ownership on voluntary, equal and mutual-beneficial basis. They include:

a) state-owned joint-operation enterprises (joint operation between state-owned enterprises);

b) collective joint-operation enterprises (joint operation between collective enterprises; and

c) state-collective joint-operation enterprises (joint operation between state and collective enterprises).

Limited Liability Corporations refer to economic units registered in accordance with the Regulation of the People's Republic of China on the Management of Registration of Corporations, with capitals from 2 to 49 investors, each investor bears limited liability to the corporation depending on his/her holding of shares, and the corporation bears liability to its debt to the maximum of its total assets.

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.

Private Enterprises refer to economic units invested or controlled (by holding the majority of the shares) by natural persons who hire labours for profit-making activities. Included in this category are private limited liability corporations, private share-holding corporations Ltd., private partnership enterprises and private sole investment enterprises registered in accordance with the Corporation Law, Partnership Enterprise Law and Tentative Regulation on Private Enterprises.

Enterprises with Funds form Hong Kong, Macao and Taiwan refers to all industrial enterprises registered as the joint-venture, cooperative, sole (exclusive) investment industrial enterprises and limited liability corporations with funds from Hong Kong, Macao and Taiwan.

Foreign Funded Enterprises refers to all industrial enterprises registered as the joint-venture, cooperative, sole (exclusive) investment industrial enterprises and limited liability corporations with foreign funds.

Light Industry refers to the industry that produces consumer goods and hand tools. It consists of two categories, depending on the materials used:

(1) Industries using farm products as raw materials. These are branches of light industry which directly or indirectly use farm products as basic raw materials, including the manufacture of food and beverages, tobacco processing, textile, clothing, fur and leather manufacturing, paper making, printing, etc.

(2) Industries using non farm products as raw materials. These are branches of light industry which use manufactured goods as raw materials, including the manufacture of cultural, educational articles and sports goods, chemicals, synthetic fiber, chemical products for daily use, glass products for daily use, metal products for daily use, hand tools, medical apparatus and instruments, and the manufacture of cultural and clerical machinery.

Heavy Industry refers to the industry which produces capital goods, and provides various sectors of the national economy with necessary material and technical basis. It consists of the following three branches according to the purpose of production or the use of products:

(1) Mining, quarrying and logging industry refers to the industry that extracts natural resources, including extraction of petroleum, coal, metal and non-metal ores.

(2) Raw materials industry refers to the industry that provides various sectors of the national economy with raw materials, fuels and power. It includes smelting and processing of metals, coking and coke chemistry, chemical materials and building materials such as cement, plywood, and power, petroleum refining and coal dressing.

(3) Manufacturing industry refers to the industry that processes raw materials. It includes machine building industry which equips sectors of the national economy, industries of metal structure and cement products, industries producing means of agricultural production, such as chemical fertilizers and pesticides. According to the above principle of classification, the repairing trades which are engaged primarily in repairing products of heavy industry are classified into heavy industry while these engaged in repairing products of light industry are classified into light industry.

Gross Industrial Output Value

(1) Definition: Gross industrial output value is the total volume of final industrial products produced and industrial services provided during a given period. It reflects the total achievements and overall scale of industrial production during a given period.

(2) Principles for calculation:

Statistics on industrial production follow the principle that all products produced by the enterprises and accepted during the reference period are to be included no matter whether they are sold or not during the reference period.

Determination of final products follow the principle that all products that are included in the calculation of grow industrial output value are the final products of the enterprise which have been accepted through quality check and require no further processing. If an enterprise has intermediate (semi-finished) products to sell, these intermediate products are considered as the final products of the enterprise.

Gross industrial output value is calculated following the principle of factory approach, i.e. industrial enterprise is used as the basic accounting unit in calculating the gross industrial output value. By this approach, value of the same product is not to be double counted, and the output value of different workshops (branch factories) should not be added. However, this approach does not exclude the possibility of double counting between enterprises.

(3) Content and calculation method: The old definition of gross industrial output value was modified during the national industrial census in 1995. The revised (new) definition of gross industrial output value consists of 3 components: value of the finished products during the reference period, income from external processing, and value of change in semi-finished products at the end and at the beginning of the reference period.

Value of the finished products during the reference period: refers to the value of all finished (semi-finished) industrial products that are produced during the reference period without the need for further processing, checked for acceptance, packed and put into the warehouse of the enterprise, including the value of own-produced equipment and the value of products provided to the projects under construction of the enterprise, and to other non-industrial or welfare units. Value of finished products during the reference period is calculated by the quantity of products produced using own materials multiplied by the average unit prices at which products are sold (excluding value-added tax). Own-produced equipment and products produced for own use are value at cost prices as in the case of enterprise accounting. Value of finished products does not include the value of finished products (semi-finished products) that are produced using the materials from the clients who make the orders.

Income from external processing: refers to income from contracted external processing of industrial products (including processing of industrial products using materials from the clients), and the income from industrial repairing work provided to other units. Income from external processing is calculated using information from the item ※products sales income§ in the enterprise accounting at the prices excluding value-added tax.

For income from services such as processing, repairing and installation of equipment provided to non-industrial units within the enterprise, if the accounting work of the enterprise is good enough to separate it from other records, and the share of such services is significant, it should also be included in the income from external processing.

Value of change in semi-finished products at the end and at the beginning of the reference period: refers to the value of change in semi-finished products at the end and at the beginning of the reference period, which generally can be obtained from accounting records of enterprises. If the enterprise accounting excludes the cost of semi-finished products, then it should not be included in the gross industrial output value, and vice versa.

(4) Changes in the coverage and method of calculation of gross industrial output value

Prior to 1984, the value of rural industry run by villages was classified into agriculture instead of industry. Since 1984, it has been included in the gross industrial output value.

Method of calculation for the gross industrial output value was modified in the industrial census in 1995. The difference in the new method as compared with the old one is outlined below:

Principle in using full value vs. processing fee: The new method stipulates that all products produced using own materials are to be calculated with full value in reporting the gross industrial output value irrespective of sophistication of production, and for external processing, it allows calculation using processing fee. In the old method, however, the use of full value or processing fee was determined by the degree of sophistication of production in different branches of industries.

Principle in determining the value of change in semi-finished products: The new method requires that value of the change in semi-finished products should be included in the gross industrial output value if it is included in the accounting record of the enterprise, otherwise it should not be included. By the old method, it is determined by the type of enterprises in terms of production cycle. If the production cycle is over 6 months, the value of change in semi-finished products is included in the gross industrial output value, otherwise it is excluded.

Difference in prices: The new method uses prices excluding value-added tax in the calculation of gross industrial output value, while the old method used prices including value-added tax.

Value-added of Industry refers to the final results of industrial production of industrial enterprises in money terms during the reference period.

Industrial value-added can be calculated by two approaches: the production approach, i.e. gross industrial output value minus intermediate input plus value-added tax, and the income approach, i.e. income for various factors used in the course of production, including depreciation of fixed assets, remuneration of labourers, net of production tax, and operating surplus. Value-added of industry in the Yearbook is calculated by production approach as following:

Value-added of industry = gross industrial output 每 industrial intermediate input + value-added tax

(1) Gross industrial output: refers to the total achievements of industrial production during a given period. Gross industrial output includes value of finished products, income from external processing, and value of change in semi-finished products at the end and at the beginning of the reference period. Since 1995, it was substituted by the gross industrial output value by new method.

(2) Industrial intermediate input: refers to purchased goods and paid services consumed during the industrial production of enterprises. Fees paid for services include fees paid for the services provided by material production sectors (industry, agriculture, wholesale and retail trade, construction, transport, post and telecommunications) and by non-material production sectors (insurance, banking, culture, education, scientific research, health and medical care, public administration, etc.). The determination of industrial intermediate input follows the principle that the goods and services must be purchased from outside and included in the gross industrial output, and that the goods and services are inputted into production and consumed (include low-value consumables) during the reference period.

Industrial intermediate input includes 5 components, namely direct consumption of materials, industrial intermediate input in manufacturing cost, industrial intermediate input in management cost, industrial intermediate input in marketing cost and expenditure on interest.

Capitals Obtained refers to capital actually received by the enterprise from investors that could be used as operational capitals for a long period. According to the current accounting system, capitals obtained can be classified by investors as state capital, collective capital, corporate capital, individual capital, capital from Hong Kong, Macau and Taiwan and foreign capital.

State capital: refers to capital which is formed through state-owned investment into the enterprise by government agencies or institutions that could represent the state in the investment.

Collective capital: refers to capital which is formed through state-owned investment into the enterprise by collective institutions or units that could represent the state in the investment.

Corporate capital: refers to capital which is formed through investment by other corporate units using assets which is at their disposal by law.

Individual capital: refers to capital which is formed through investment by individuals outside the enterprise or employees of the enterprise using their personal legal properties.

Capital from Hong Kong, Macau and Taiwan: refers to capital which is formed through investment by investors from Hong Kong, Macau and Taiwan of China using their assets of various forms.

Foreign capital: refers to capital which is formed through investment by foreign investors.

Total Assets refer to all economic resources, in monetary terms, that is owned or controlled by enterprises, including properties, creditors equity and other economic rights of all forms. Classified by the degree of equitability, total assets include circulating assets, long-term investment, fixed assets, intangible assets and deferred assets, and other assets. Data on this indicator can be obtained by the year-end figures of total assets in the Assets and Liability Table of accounting records of enterprises.

Total of Working Capitals refer to capitals which can be cashed in or spent or consumed in an operating cycle of one year or over one year, including cash, all kinds of deposits, short term investment, receivable and payable payment for goods or deposits.

Average Value of Working Capitals refers to the average value of all working capitals of the enterprise during the reference period.

Original Value of Fixed Assets refers to the value of payment by the enterprise in building, purchasing installing reconstructing, expending or transforming a particular item of fixed assets. In general, it includes value of purchase, cost for packaging, transportation, installation, etc.

Annual Average of Net Value of Fixed Assets refer to average of the net value of fixed assets during the reference period, calculated with the following formula:

Annual Average of Net Value of Fixed Assets = sum of net value of fixed assets at the beginning and at the end of each month from January to December / 24.

Information on this indicator can be obtained from the beginning and ending figures of the original value of fixed assets and cumulative depreciation from the Assets and Liability Table of enterprises.

Net value of fixed assets refers to the original value of fixed assets minus depreciation over the years, i.e.:

Net value of fixed assets = original value of fixed assets 每 cumulative depreciation

Total Liquid Liabilities refer to enterprises' total debt payable within an operating cycle of one year or over one year, including short-term loans, notes and accounts payable, advance payments received, wages and welfare funds payable, taxes and profit payable, other payables, fees received by advance payment, etc.

Liquid liabilities feature in the short term of payment, immediate payment at the request of creditors, or payable within one year. Data on this item can be obtained from the ending figures on liquid liabilities from the Assets and Liability Table of enterprises.

Total Long-term Liabilities refers to the debt payable within an operating cycle of one year or over one year. It is the capital that enterprises raised from creditors for the long-term use of enterprises in addition to capitals put into the enterprise by investors, and constitutes the economic liabilities that enterprises have to repay by assets or labour services, including long-term loans, payable liabilities, long-term payable, other long-term liabilities, etc. Compared with the liquid liabilities, the long-term liabilities feature in large volume, longer term for repayment, and larger benefits for investors. Data on this item can be obtained from the ending figures on long-term liabilities from the Assets and Liability Table of enterprises.

Creditors' Equity refers to investors ownership of net assets of the enterprise, which is equal to the total assets of the enterprise minus its total liabilities, including the primary input actually received at the enterprise from investors, capital accumulation fund, surplus accumulation fund and undistributed profit. When the total of creditors＊ equity is less than zero, that indicates the liability of the enterprise is larger that its assets.

Sales Revenue of Industrial Products refers to the revenue from the sales of finished and semi-finished products and from rendering of industrial services by industrial enterprises during the reference period.

Cost of Industrial Products Sold refers to the actual cost of finished and semi-finished products sold and industrial services rendered by industrial enterprises during the reference period.

Tax and Extra Charges on Sales of Products refer to the tax on city maintenance and construction, consumption tax, resources tax and extra charges for education, which should be borne by the enterprises in selling products and providing industrial services during the reference period.

Total Profits refer to the final achievements of production and operation of the enterprises, represented by the total profits after deducting losses (loss is expressed by the negative figure). It is the sum of profits from operation, income from subsidies, investment earnings, net income from activities other than operation, and adjustment of profits and losses of previous years.

Value-added Tax Payable refers to the amount of the value-added tax which should be paid by the enterprises during the reference period. It is the sum of tax on sales, export rebate, and transferred tax on purchases of the current year, minus the tax on purchases of the current year. Value-added tax payable of small-size enterprises is determined by the taxable sales of the year multiplied by the tax rate.

Average Annual Number of Employed Persons Employed persons refer to all those who are employed in enterprises and receive remunerations therefrom, including currently working employees, retirees who are re-employed, teachers of local-run schools, as well as foreigners, staff from Hong Kong, Macau and Taiwan, part-time employees and persons with second job who are employed by the enterprise, and employees of other units temporarily working in the enterprises, but excluding former employees who left the enterprise with their employment records still kept by the enterprises.

Average number of employed persons refers to the number of employees everyday during the reference period, calculated with the following fomula:

Monthly average number = sum of actual employees everyday in reference month/number of calendar dates in reference month

Quarterly average number = sum of monthly average number in reference quarter/3

Annual average number = sum of monthly average number in reference year/12

Ratio of Profits, Taxes and Interests to Average Assets reflects the profit-making capability of all assets of the enterprise and is a key indicator manifesting the performance and management and evaluating the profit-making potential of the enterprise. It is calculated as follows:

Ratio of Profits, Taxes and Interests to Average Assets (%) = [(total profits + total taxes + interest payment) / average assets ]℅100%

In the above formula, total taxes is the sum of tax and extra charges on the sales of products and value-added tax payable; and average assets is the arithmetic mean of the sum of beginning assets and ending assets.

Ratio of Debts to Assets reflect both the operation risk and the capability of the enterprise in making use of the capital from the creditors. It is calculated as follows:

Ratio of Debts to Assets (%) = (total debts / total assets)℅100%

Both assets and debts are figures at the end of the reference period.

Turnover of Working Capital refers to the number of times of turnover of working capital in a given period of time, which reflects the speed of the turnover of working capital of industrial enterprises, and is calculated as follows:

Turnover of Working Capital=(sales revenue of products) / (average balance of total working capital)

In the above formula, average balance of total working capital refers to the arithmetic mean of the sum of working capital at the beginning and at the end of the reference period.

Ratio of Profits to Total Industrial Costs refers to the ratio of profits realized in a given period to the total costs in the same period, which reflects the economic efficiency of input cost and is calculated as follows:

Ratio of Profits to Total Industrial Cost(%)=(total profits/ total costs)℅100%

Total costs in the above formula is the sum of cost of products sold, marketing cost, management cost and financial cost.

Overall Labour Productivity of Industrial Enterprises reflects efficiency of production and economic results of labour input of enterprises. The formula used is:

Overall Labour Productivity=(value added of industry) / (average number of staff and workers)

Ratio of Sales to Gross Output Value reflects the degree at which industrial products are sold. It helps to analyze the linkage between production and sales and the extent of the needs of the society that has been met by the supply of industrial products. It is calculated as follows:

Ratio of Sales to Gross Output Value=(Industrial sales / Gross industrial output value at current prices) ℅100%