Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country
(or a region) during a certain p eriod of time. Gross domest ic product is expres sed in three different forms, i.e. value,
income, and products respect ively. GDP in its value form refers to the total value of all goods and services p roduced by all
resident units during a certain p eriod of time, minus t he t otal value of input of goods and services of the nature of non-
fixed asset s; in order term, it is the sum of the value-added of all resident units. GDP in the form of income includes the
income created by all resident units and distributed to resident and non-resident units. GDP in the form of products refers to
the value of all goods and services for final consumption by all resident units minus the net exports of goods and services
during a given period of time. In the practice of national accounting, gross domestic p roduct is calculat ed with three
approaches, i.e. production app roach, income approach and exp enditure approach, which reflect gross domestic product and
its composit ion from different aspects.

Gross National Income (GNI) also known as gross national product, refers t o the final result of the primary dist ribution
of the income created by all the resident units of a country (or a region) during a cert ain period of t ime. The value-added
created by the resident units of a country engaged in production activities is distributed, during the primary distribution,
mainly to t he res ident units of that country, while p art of it is distributed t o the non-resident units in the form of production
t ax and import duties (minus subsidies to production and import), remuneration for the labourers and p roperty income. At
the meantime, a part of the value-added created abroad is distributed to the resident units of the country in the form of
production tax and import duties (minus subsidies to production and import), remunerat ion for the labourers and property
income. The concept of gross national income is thus developed, which equals to the gross domes tic product plus the net
factor income from abroad. Unlike the gross domestic product which is a concept of production, the gross national income is a
concept of income.

Three Industries Classification of economic act ivit ies into t hree branches of indust ries is a common practice in t he
world, although the grouping varies to some extent form country to country. In China economic act ivities are categorized into
following indust ries:

Primary industry: refers to agricult ure, fores try, animal husbandry and fishery.

Secondary industry: refers to mining and quarrying, manufacturing, p roduction and supply of elect ricit y, water and gas,
and construct ion.

Tertiary industry: refers to all other economic activities not included in primary or secondary industry.

Labourers Remuneration refers to the whole payment of various forms earned by the labourers from the productive
activities they are engaged in. It includes wages , bonus es and allowances the labourers earned in monet ary form and in
kind. It also includes the free medical services provided to the labourers and the medicine expenses, traffic subsidies and
social insurance, housing fund paid by the employers. As the individual economy is concerned, since the labourers
remuneration is not easily distinguished from the operating profit, both are treated as labourers remuneration.

Net Taxes on Production refers to the difference of the taxes on production minus the subsidies on production. The taxes
on production refers to the various taxes, extra charges and fees levied on the production units on their production, sale an
d business activities as well as on the use of some factors of production, such as fixed assets, land and labour force in the
production activities they are engaged in. In contras t to the taxes on production, the subsidies on production refer to the
unilateral government t ransfer to the production units and are therefore regarded as negative taxes on p roduct ion. They
include subsidies on the loss due to implementation of government policies, price subsidies, etc.

Depre ciation of Fixed As sets refers to the depreciation of fixed assets of a given period, drawn in accordance with the
stipulated depreciation rate for the purpose of compensating the wear loss of the fixed assets or the depreciation of fixed ass
ets calculated in a fictitious way in accordance with the s tipulated unified depreciation rate in the nat ional economic
accounting system. It reflects the value of transfer of the fixed assets in the production of the current period. The
depreciation of fixed assets in various enterprises and ins tit utions managed as enterprises refers t o t he dep reciation exp
ens es act ually drawn. In government agencies and institutions not managed as ent erprises which do not draw the
depreciation expenses, as well as for the houses of residents, the depreciat ion of fixed asset s is the imput ed depreciation,
which is calculated in accordance with the stipulated unified depreciation rat e. In principle, the depreciation of fixed asset s
should be calculated on t he basis of the repurchased value of the fixed ass ets. However, there is no actual condition to re-
evaluate all the fixed assets in China. Therefore, the above-mentioned methods are temporarily adopted at present.

Operating Surplus refers to the balance of the valueadded creat ed by t he resident units deducting the labourers
remuneration, net t axes on production and the depreciation of fixed assets. It is equivalent to the business profit of the
enterprises plus subsidies on production, but the wages and welfare expenses paid from the profits should be deducted.

GDP by Expendi ture Approach refers to the method of measuring the final results of production act ivities of a country
(region) during a given period from the perspective of final use. It includes final consumption, total capit al formation and net
export of goods and services, i.e.: GDP by exp enditure approach = final consumption + total capital formation + net export
of goods and services

Final Consumption refers to the tot al expendit ure of resident units for purchases of goods and services from domestic
economic territory and abroad to meet t he requirements of material, cultural and spiritual life. It excludes the expenditure of
nonresident units on consumption in t he economic territ ory of the count ry. The final consumption is broken down into hous
ehold consumption and government consump tion.

Households Consumption refers to the total expenditure of resident hous eholds on the final consumpt ion of goods and
services. In addition to the consumpt ion of goods and services bought by the households directly with money, the
households consumption also includes expenditure on goods and services obtained by the households in ot her ways, i.e. the
so-called imput ed consumption exp enditure, which includes the following: (a) the goods and services p rovided to the hous
eholds by t he employer in the form of payment in kind and transfer in kind; (b) goods and services p roduced and
consumed by the households thems elves, in which the services refer only to t he owner-occupied housing and domestic and
individual services p rovided by the paid household workers ; (c) financial intermediate services provided by financial
institutions; (d) insurance services p rovided by insurance companies.

Government Consumption refers to the expenditure on the consumption of the public services provided by the
government t o the whole society and the net expendit ure on the goods and services provided by t he government to the
households free of charge or at low prices. The former equals to the outp ut value of the government services minus the
value of operating income obt ained by t he government department s. The lat ter equals to the market value of the goods
and services provided by the government free of charge or at low prices to the households minus the value received by the
government from the households.

Total Capital Formati on refers t o the fixed assets acquired minus those disposed of and the net value of invent ory,
including the t otal fixed capital formation and the increase in inventory.

Total Fixed Capital Formati on refers t o the value of fixed as set s acquired minus those disposed of during a given
period. Fixed as sets are t he assets p roduced through production activities with specified unit value which could be used for
over one year, excluding natural assets. Total fixed capital formation can be categorized into total tangible capital formation
and total intangible capital formation. The total tangible capital formation include the value of the construction projects,
installation projects comp leted and the equipment, apparat us and instruments purchased as well as the value of land
improved, the value of draught animals, breeding stock, animals for milk, wool and for recreational purpose, and the newly
increased forest wit h economic value during a given period. The t otal intangible capital formation includes the prospecting of
minerals, the acquisition of computer software minus the disposal of them.

Increase in Inventory refers to the market value of the change in inventory of resident units during a given period, i.e.
the difference of value between the beginning and the end of the period minus the current gains due to the change in prices.
The increase in invent ory can be posit ive or negat ive. A pos itive value indicates the increase in invent ory while a negat ive
value indicates t he decrease in stock. The inventory includes the raw materials, fuels and reserve materials purchased by the
production units as well as the invent ory of finished product s, semifinished product s, work-in-progress, etc.

Net Export of Goods and Services refers to the difference of the exports of goods and services minus the import s of
goods and s ervices. The import s include the value of various good and services sold or gratuitously t ransferred by the
resident unit s to the non-resident units. The imp ort s include t he value of various goods and s ervices p urchased or
gratuitously acquired by the resident units from the non-res ident units. Because the provision of services and t he us e of t
hem happen simultaneously, the acquisition of services by t he resident units from abroad is usually treated as import while
the acquisition of services by non-resident units in this country is usually treated as export. The export and import of goods
are calculated at FOB.

Direct Input Coeffici ent refers to the volume of p roduct s and services of industry i, which is consumed directly by
industry j in the course of its production or business, recorded as aij (i,j=1,2,⋯,n). The direct input coefficient table or direct
input coefficient matrix, usually denoted as A, is a table that presents direct input coefficients of all indus tries.

Total Input Coefficient refers to the volume of products and services of industry i which is consumed directly and indirectly
by industry j in p roducing each unit of final use. The total input coefficient table or tot al inp ut coefficient matrix, usually
denot ed as B, is a table that present s total input coefficients of all industries.

Institutional Units refer to economic entit ies that are ina position to own assets and incur liabilities, to engage
independent ly in economic activities, and to conduct transactions with other entities.

Institutional Sectors refer groups of institutional units that are homogenous in nature. Following 4 institutional s ectors
are identified in the flow of fund accounts: non-financial corporations, financial institut ions, governments and households.
Also treated as an institutional sector is the rest of the world, which is compos ed of non-res ident units that have economic
relations with t he resident units.

Non-Financi al Corporati ons and the Sector of Non- Financial Corporati ons Non-financial corp orations refer to
resident corporat ions that are engaged in the production of goods and the provision of non financial services in the market,
mainly covering corp orate enterpris es of various ty pes engaged in the above-mentioned act ivities. All non-financial
corporations make up the sector of non-financial corporations.

Financial Institutions and the Sector of Financial Institutions Financial institutions refer t o res ident inst itutions
that are engaged in the financial intermediate services or auxiliary financial activit ies that are closed related with financial
intermediate services, mainly covering central banks, commercial banks, policy-relat ed banks , non-banking credit ins
titutions and insurance companies. All financial institutions make up the sector of financial institutions.

Government Units and the Sector of Governments Government units refer to legal entities and their auxiliary units
within the territory of China that are established through political process and are empowered with legislative, administrative
or judicial rights over ot her inst itut ional units in a given region. The main function of government units is t o acquire funds
through taxation or other means, to provide public services to the society and households, and t o conduct redistribution of
income and properties of the society through transfer payment . Government unit s cover mainly adminis trative and non-p
rofit institutional units of various types. All government units make up the sector of governments.

Households and the S ector of Households Households refer to resident individuals or groups of resident individuals
who share common living facilities, pool together entire or part of their income and properties at their common disposal, and
share their housing, food and ot her consumer goods and services. All households make up t he sector of households.

Non-resident Uni ts and the Rest of the World Nonresident unit s refer to of units that are of a non-res ident nature.
All non-resident units that have trans actions wit h resident units make up the sect or the res t of the world.

Total Income of Primary Distribution Primary distribution refers to the distribution of net results from production
activities among the owners of fact ors of production and t he governments. Fact ors of product ion include labour force, land
and capitals . Owners of labour force gain remuneration by providing labour. Owners of land receive rents from leasing of
land. Owners of capitals get income of various forms depending on the type of capitals : bankers receive income from
interest and share holders receive dividends or non-dis tributed profit s. Governments either gain production tax or pay for
subsidies by p articipating directly or indirectly in the production process. Results of primary dis tribution generate the total
income of primary dis tribution of each s ector, and the sum of the tot al income of primary dis tribution of all sectors make
up the gross national income, or the gross nat ional product.

Current Trans fers Transfer refers t o the transaction of provis ion of goods, services or assets by an inst itutional unit to
anot her inst itutional unit without receiving any goods, services or as sets in return from the recipient. Current trans fers refer
to all kinds of trans fers other than capital t ransfers, including income t ax, payment to social securities , social allowances
and other current transfers.

Total Disposable Income Total income of primary distribution is re-dist ributed through current transfer, resulting in the
total disposable income of various institutional sectors. The sum of t otal disposable income of all institutional sectors makes
up the tot al national disposable income.

Total Savings refer to the total disposable income minus the final consumpt ion. Total savings of all s ectors make up the
total national savings.

Capital Transfer refers to the free payment from one sector to anot her sector for non-financial capital formation, and
is a trans act ion t hat seeks no return from the recipient . The capit al transfer differs from the current t ransfer in 2 aspect s:
1) The purpose of t he capital transfer is investment rather than consumption. 2) The capital transfer features the transfer of
the ownership of the ass ets other than inventory and cash, and the capital transfer in its monet ary form involves t he
disposal of assets other than inventory. Capital transfer includes investment subsidies and other capital trans fers.

Net Financial Investment reflects the surplus or shortage of capitals of institutional sectors or of the economy in general.
It refers to total s avings plus the income from capit al transfer minus payment for capital transfer and t he non-financial
investment from the point of view of physical transaction. In termsof monetary transaction, it is the difference between the
increase in financial assets minus the increase of the financial liabilities.

Currency in Circulation refers to currency that is in circulation in the market, including local and foreign currencies.

Deposits refer to credit transact ions by which financial ins titutions accept depos its from clients who could withdrawtheir
deposit at any time or by agreed t ime frame. They include current dep osit, fixed deposit, household savings deposit,
government deposit, foreign exchange deposit and other deposits.

Loans refer to credit transactions by which financial institutions lend their capital to client s at certain level of interest
rates, which t he latt er will rep ay by agreed time frame. They include short-term loans, medium and long-term loans ,
government loans, foreign exchange loans and other loans.

Securities (excluding stocks ) refer t o writ ten certificates representing creditors ' right s, purchased by bond holders
or owned by s elling product s, which can be t ransact ed at t he financial market s. They include government bonds , financial
bonds, corp oration bonds, commercial drafts, preferential stocks that p rovide fixed income without the right to share the
residual value of corporations, etc.

Stocks and Other Holding Rights refer to t he rights by stockholders and direct investors on the net ass ets of
corporations t hey inves ted in. Stocks refer to negotiable s ecurities on credit or's rights, issued by s tock companies cert
ifying t he investment by st ockholders and their right s and duties depending on their stocks. Other holding rights refer to
the direct investment by instit utional units t o ot her unit s in forms other than st ocks and negotiable securities on creditor's
rights, including tangible assets such as land, buildings, machines and equipment, invent ory, resources, etc., and intangible
assets such as trade marks, patents, rights on land use, licenses, commodit y credit, and the cap itals . Documents on
holding rights usually include certificates on creditor's right, cert ificates on investment or on participation, etc.

Insurance Reserve Funds refer to reserve fund for life insurance, the net pension fund, advance payment of premium
and non-claimed res erves.

Settlement Fund refers t o bank fund of financial institutions for settlement that is in the process of remit tance.

Transactions Between Financial Institutions refer to flow of capital between financial inst itut ions , including interbank
deposits and loans.

Reserve Funds refer to savings of financial institutions in the central bank and designated reserves to the central bank.

Loans from the Central Bank refer to loans from the central bank to financial institut ions.

Current Account includes goods , services, earnings and current trans fers.

Import and Export of Goods refer to imp ort ed or exported goods through Chinese customs. Both import and export
of goods are valued at free on board (f.o.b.) prices. Free on board prices can be regarded as t he purchas er's prices paid by
importers when claiming goods at the boarder of the export ers. When the importer claim the imported goods, the goods
have been loaded in imp orter's carriers or ot her carriers, and the exporter has paid export duty or received export redeem.

Import and Export of Services refers services provided between resident and non-resident units, including services on
transportation, tourism, communications, construction, insurance, banking, computer and information, consultation,
advertisements and p ublicity, as well as film, audio and video services, roy alty for patents, trademarks and other special
rights, other commercial services, and government services.

Earnings refers income from provision of factors of production between resident and non-resident units , including
compensation of labours and earnings from investment. Earnings from investment include earnings from and expenses on
direct investment, security investment and other investment, as well as reinvestment of earnings from direct inves tment.

Capital Account includes capital transfers such as immigration transfer, reduction or exemption of debts, etc..

Financial Account includes direct investment , security investment and ot her investments.

Direct Investment refers to investment by foreign investors or investors from Hong Kong, Macao and Taiwan in China,
or by Chines e investors in foreign count ries or in Hong Kong, Macao and Taiwan, in forms of exclusive investment, joint
investment, contracted operation and cooperative development,.

Security Investment refers to t he issue of stocks and securities by China in foreign countries or in Hong Kong, Macao
and Taiwan, and the purchase by Chinese units of stocks and securit ies issued in foreign countries or in Hong Kong, Macao
and Taiwan.

Other Investment refers to all external transactions on financial ass ets and liabilities other than direct investment and
security investment, including trade credits, loans, currency, savings and other as sets, provided by foreign countries to China
and by China to foreign count ries.

Reserve Assets, Net Increase refers to t he net balance between the end of the reference year and the end of the
previous year, in the gold reserve, foreign exchange reserve, special drawing right s in the International Monetary Fund, and
the us e of the Fund s credits. The increase in the reserve asset s is expres sed in negative figure and the decrease in the
reserve assets is expressed in positive figure.