Industry refers to the material production sector which is engaged in extraction of natural resources and p rocessing and
reprocessing of minerals and agricultural product s, including (1) extraction of natural resources, such as mining, salt product
ion, logging (but not including hunting and fishing); (2) process ing and reprocessing of farm and sideline produces, such as
rice husking, flour milling, wine making, oil p ressing, cotton ginning, silk reeling, spinning and weaving, and leather making;
(3) manufacture of industrial products, such as steel making, iron smelt ing, chemicals manufacturing, petroleum process ing,
machine building, timber processing; water and gas production and electricity generation and supply; (4)repairing of industrial
p roducts such as the repairing of machinery and means of transp ort (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 group ed into industry.

Units of indust rial statist ics survey corporate industrial enterp rises with independent accounting system.

Corporate industrial enterprises with independent accounting sy stem refer to enterprises engaging in indus trial production
act ivities, which meet the following requirements : ① They are established legally, having their own names, organizations,
location, able t o take civil liability ; ② They posses s and us e their asset s independently, assume liabilit ies, and are ent
itled to sign contracts with other units; ③ They are financially independent and compile their own balance sheets.

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

State-owned Enterpris es refer to industrial enterpris es where the means of production or income are owned by the
state. Joint st ate-private industries and private industries, which exist ed before 1957, have been transformed into st ate
industries. St atis tics on these enterprises has been included in the stat eowned industries since 1957 when s eparation of
data was no longer necess ary.

Col lecti ve-owned Enterpris es refer to indust rial ent erprises where t he means of production are owned collect ively,
including urban and rural enterprises invested by collectives and some enterp rises which were formerly owned privately but
have been registered in industrial and commercial administration agency as collective units through raising fund from the p
ublic.

Share-holding Cooperative Enterprise s refer to economic units s et up on cooperat ive bas is, wit h funding part ly
from members of the enterp rise and p artly from outside investment, where the op eration and management is decided by t
he members who also participate in the production, and the distribut ion of income is based both on work (labour input) and
on shares (capital input).

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

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

b) collective joint -operation enterpris es (joint op erat ion between collective enterprises; and

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

Limi ted Liability Corporati ons refer to economic units regist ered in accordance with the Regulation of the People's
Republic of China on the Management of Registrat ion of Corporations, wit h capitals from 2 t o 49 investors, each investor
bears limit ed liability to the corporat ion depending on his/her holding of shares, and the corporation bears liability to its
debt to the maximum of its total as sets.

Share-holding Corporations Ltd. refer to economic units regist ered in accordance with the Regulation of the People's
Republic of China on the Management of Registrat ion 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 t otal ass ets.

Pri vate Ente rpris es refer t o economic unit s invested or controlled (by holding t he majorit y of t he 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 part nership enterprises and private sole investment enterpris es registered in
accordance with the Corporation Law, Partnership Enterprise Law and Tentative Regulation on Private Enterprises.

Enterpri ses wi th Funds form Hong Kong, Macao and Taiwan refers to all industrial enterprises registered as the
jointvent ure, 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 enterpris es registered as t he joint-vent ure, cooperat ive, sole
(exclusive) inves tment industrial enterprises and limited liability corporat
ions with foreign funds.

Light Industry refers to the industry that produces consumer goods and hand t ools . It consists of two cat egories,
depending
on the materials used:

(1)Industries using farm products as raw materials. These are branches of light indus try which directly or indirectly use farm p
roducts as basic raw materials, including the manufacture of food and beverages, tobacco processing, text ile, clothing, fur
and leather manufacturing, p aper 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 p roducts for daily use, glas s products for daily us e, metal products for daily use, hand tools, medical apparat us
and instruments , and the manufacture of cultural and clerical machinery.

Heavy Industry refers to t he industry which produces capital goods, and provides various sect ors 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 extract s natural resources, including extract ion of
petroleum, coal, metal and non-metal ores and logging.

(2)Raw materials industry refers t o the industry that provides various sectors of the national economy with raw mat erials,
fuels and power. It includes smelting and processing of metals, coking and coke chemist ry, 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, indust ries producing means of
agricultural p roduction, such as chemical fertilizers and pesticides. According to the above principle of classification, the
repairing trades which are engaged primarily in repairing p roduct s 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) Definit ion: Gross indus trial 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 s cale of industrial p roduction 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 mat ter whether they are sold or not during the
reference period. Det ermination of final products follow the principle t hat 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 process ing. If an enterprise has intermediat e (semi-finished) p roduct s to sell, t hese int ermediate
product s are considered as the final products of the enterprise. Gross indus trial out put value is calculat ed following the
principle of factory approach, i.e. industrial enterpris e 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 ap proach does not exclude the possibility of double
counting between enterprises.

(3) Content and calculation method: The old definition of gross indust rial output value was modified during the national
industrial census in 1995. The revis ed (new) definit ion of gross industrial output value cons ists 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 t he beginning of the reference p eriod.

Value of the finished products during the reference period: refers to the value of all finished (semi-finished) industrial product
s that are produced during the reference period wit hout the need for further processing, checked for accept ance, packed and
put into the warehouse of the enterp rise, including the value of own-produced equipment and the value of products provided
to the projects under const ruction of the enterprise, and to ot her non-industrial or welfare units. Value of finished products
during the reference p eriod is calculated by t he quant ity of p roducts produced using own materials multiplied by t he
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 p rices as in the case of ent erprise accounting. Value of finished products does not include t he
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
process ing of industrial products us ing mat erials from the clients), and the income from indust rial repairing work p rovided
to other units. Income from external processing is calculated using information from the item "products sales income" in the
enterp rise accounting at the prices excluding value-added tax.