NBS-OECD Workshop on National Accounts 6-10 November 2006

1. NBS-OECD Workshop on National Accounts6-10 November 2006 Measuring Chinese Productivity Growth Paul Schreyer OECD

2. Background • OECD Productivity Database: • Economy-wide labour productivity levels and growth rates for most OECD member countries • Economy-wide multi-factor productivity growth rates for 19 OECD countries • Objective: • Extend country coverage to include some large non-member countries, in particular China • Project: • Paper commissioned from Carsten Holz (University of Hong Kong) to assess data availability for Chinese productivity measures

3. Background • Focus of presentation: • Labour productivity • Capital measures in the paper are very preliminary • Also, for multi-factor productivity, OECD constructs its own, “harmonised” capital measures • Purpose of presentation: • Report on some findings • Put forward questions to solicit comments from NBS on evaluation of China data • Present candidate series for labour productivity to be integrated into the productivity database

4. Structure of the report Chapter 2 Output measures Chapter 3 Labour input measures Chapter 4 Capital measures Chapter 5 Productivity analysis

5. Output measures (1) • 1. Total economy and main industrial sectors • National GDP growth based on production approach, at current and constant prices • Source: Statistical Abstract 2006, which shows data for 1993-2004 which takes account of the 2004 census benchmark revision •  Any reason to prefer expenditure or income-based approach over production approach? • Any reason to prefer the sum of provincial GDPs over the national GDP data? Table 3 reports rising differences of 8 – 19% for the years 2000-2004 in the production based GDP levels with provincial GDPs > national GDP

6. Output measures (2) • Link between sectoral and total growth rates in real terms • Which index numbers are used for aggregation? • How did the changes in nominal GDP due to 2004/05 benchmark revision affect real growth rates of sectors and of the total economy? •  How is constant-price value added for industrial sectors derived?

7. Labour input measures • Total economy and main industrial sectors • Variable: total employment, or more precisely, total “labourers” i.e., the number of persons at end-year aged 15 and above who worked for monetary or non-monetary compensation for at least one hour in the week preceding the population census • Source: Statistical Yearbook • Primary data source: population censuses • How are intermediate years derived? • Do these numbers include self-employed and military employees? • Is there any information about average hours worked by person? • Any reason to prefer alternative source of employment based on report form data?

8. China – total economy: GDP per person employed

9. Total economy – GDP per person employed

10. Labour productivity • Some additional questions: • How well do employment and output data match? • Is there a GDP adjustment for the non-observed economy, and if so, is there also an adjustment for employment?

11. Proposal for integration of Chinese productivity series for inclusion into the OECD productivity data base Labour productivity Annual labour productivity growth (GDP per employed person) Total economy and “industry” (=manufacturing) Starting with 1990 Source: Statistical Yearbook or directly data transmitted to OECD ANA database Multi-factor productivity: no full integration at this point but link to existing papers Revised version of the Holz paper as STD Working Paper