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 period of time. Gross domestic product is expressed in three different forms, i.e. value, income,
and products respectively. GDP in its value form refers to the total value of all goods and services produced by all resident
units during a certain period of time, minus the total value of input of goods and services of the nature of non-fixed assets;
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 product is calculated with three approaches, i.e.
production approach, income approach and expenditure approach, which reflect gross domestic product and its composition
from different aspects.

Gross National Income (GNI)  also known as gross national product, refers to the final result of the primary distribution
of the income created by all the resident units of a country (or a region) during a certain period of time. The value-added
created by the resident units of a country engaged in production activities is distributed, during the primary distribution,
mainly to the resident units of that country, while part of it is distributed to the non-resident units in the form of production
tax and import duties (minus subsidies to production and import), remuneration for the labourers and property 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), remuneration for the labourers and property
income. The concept of gross national income is thus developed, which equals to the gross domestic 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 activities into three branches of industries is a common practice in the world,
although the grouping varies to some extent form country to country. In China economic activities are categorized into
following industries:

Primary industry: refers to agriculture, forestry, animal husbandry and fishery.

Secondary industry: refers to mining and quarrying, manufacturing, production and supply of electricity, water and gas, and
construction.

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, bonuses and allowances the labourers earned in monetary 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 and 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 contrast to the taxes on production, the subsidies on production refer to the
unilateral government transfer to the production units and are therefore regarded as negative taxes on production. They
include subsidies on the loss due to implementation of government policies, price subsidies, etc.

Depreciation of Fixed Assets   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
assets calculated in a fictitious way in accordance with the stipulated unified depreciation rate in the national 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 institutions managed as enterprises refers to the depreciation
expenses actually drawn. In government agencies and institutions not managed as enterprises which do not draw the
depreciation expenses, as well as for the houses of residents, the depreciation of fixed assets is the imputed depreciation,
which is calculated in accordance with the stipulated unified depreciation rate. In principle, the depreciation of fixed assets
should be calculated on the basis of the re-purchased value of the fixed assets. 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 value added created by the resident units deducting the labourers
remuneration, net taxes 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 Expenditure Approach   refers to the method of measuring the final results of production activities of a country
(region) during a given period from the perspective of final use. It includes final consumption, total capital formation and net
export of goods and services, i.e.:

GDP by expenditure approach = final consumption + total capital formation + net export of goods and services

Final Consumption   refers to the total expenditure of resident units for purchases of goods and services from domestic
economic territory and abroad to meet the requirements of material, cultural and spiritual life. It excludes the expenditure of
non-resident units on consumption in the economic territory of the country. The final consumption is broken down into
household consumption and government consumption.

Households Consumption   refers to the total expenditure of resident households on the final consumption of goods and
services. In addition to the consumption 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 other ways, i.e. the so-called
imputed consumption expenditure, which includes the following: (a) the goods and services provided to the households by
the employer in the form of payment in kind and transfer in kind; (b) goods and services produced and consumed by the
households themselves, in which the services refer only to the owner-occupied housing and domestic and individual services
provided by the paid household workers; (c) financial intermediate services provided by financial institutions; (d) insurance
services provided by insurance companies.

Government Consumption   refers to the expenditure on the consumption of the public services provided by the
government to the whole society and the net expenditure on the goods and services provided by the government to the
households free of charge or at low prices. The former equals to the output value of the government services minus the value
of operating income obtained by the government departments. The latter 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 Formation   refers to the fixed assets acquired minus those disposed of and the net value of inventory,
including the total fixed capital formation and the increase in inventory.

Total Fixed Capital Formation   refers to the value of fixed assets acquired minus those disposed of during a given
period. Fixed assets are the assets produced 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 completed and the equipment, apparatus 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 with economic value during a given period. The total 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 inventory can be positive or negative. A positive value indicates the increase in inventory while a negative
value indicates the decrease in stock. The inventory includes the raw materials, fuels and reserve materials purchased by the
production units as well as the inventory of finished products, semi-finished products, work-in-progress, etc.

Net Export of Goods and Services   refers to the difference of the exports of goods and services minus the imports of
goods and services.  The imports include the value of various goods and services sold or gratuitously transferred by the
resident units to the non-resident units. The imports include the value of various goods and services purchased or
gratuitously acquired by the resident units from the non-resident units. Because the provision of services and the use of them
happen simultaneously, the acquisition of services by the 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 Coefficient   refers to the volume of products 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 industries.

Total Input Coefficient   refers to the volume of products and services of industry i which is consumed directly and
indirectly by industry j in producing each unit of final use. The total input coefficient table or total input coefficient matrix,
usually denoted as B, is a table that presents total input coefficients of all industries.

Institutional Units   refer to economic entities that are in a position to own assets and incur liabilities, to engage
independently 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 sectors
are identified in the flow of fund accounts: non-financial corporations, financial institutions, governments and households.
Also treated as an institutional sector is the rest of the world, which is composed of non-resident units that have economic
relations with the resident units.

Non-Financial Corporations and the Sector of Non-Financial Corporations   Non-financial corporations refer to
resident corporations that are engaged in the production of goods and the provision of non financial services in the market,
mainly covering corporate enterprises of various types engaged in the above-mentioned activities. All non-financial
corporations make up the sector of non-financial corporations.

Financial Institutions and the Sector of Financial Institutions   Financial institutions refer to resident institutions that
are engaged in the financial intermediate services or auxiliary financial activities that are closed related with financial
intermediate services, mainly covering central banks, commercial banks, policy-related banks, non-banking credit institutions
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 other institutional units in a given region. The main function of government units is to acquire funds
through taxation or other means, to provide public services to the society and households, and to conduct redistribution of
income and properties of the society through transfer payment. Government units cover mainly administrative and non-profit
institutional units of various types.  All government units make up the sector of governments.

Households and the Sector 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 other consumer goods and services. All households make up the sector of households.

Non-resident Units and the Rest of the World   Non-resident units refer to of units that are of a non-resident nature. All
non-resident units that have transactions with resident units make up the sector the rest of the world.

Total Income of Primary Distribution    Primary distribution refers to the distribution of net results from production
activities among the owners of factors of production and the governments. Factors of production 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-distributed profits. Governments either gain production tax or pay for subsidies by
participating directly or indirectly in the production process. Results of primary distribution generate the total income of
primary distribution of each sector, and the sum of the total income of primary distribution of all sectors make up the gross
national income, or the gross national product.

Current Transfers   Transfer refers to the transaction of provision of goods, services or assets by an institutional unit to
another institutional unit without receiving any goods, services or assets in return from the recipient. Current transfers refer to
all kinds of transfers other than capital transfers, including income tax, payment to social securities, social allowances and
other current transfers.

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

Total Savings   refer to the total disposable income minus the final consumption. Total savings of all sectors make up the
total national savings.

Capital Transfer   refers to the free payment from one sector to another sector for non-financial capital formation, and is a
transaction that seeks no return from the recipient. The capital transfer differs from the current transfer in 2 aspects: 1) The
purpose of the capital transfer is investment rather than consumption. 2) The capital transfer features the transfer of the
ownership of the assets other than inventory and cash, and the capital transfer in its monetary form involves the disposal of
assets other than inventory. Capital transfer includes investment subsidies and other capital transfers.

Net Financial Investment   reflects the surplus or shortage of capitals of institutional sectors or of the economy in
general. It refers to total savings plus the income from capital transfer minus payment for capital transfer and the non
-financial investment from the point of view of physical transaction. In terms of 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 transactions by which financial institutions accept deposits from clients who could withdraw their
deposit at any time or by agreed time frame. They include current deposit, 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 clients at certain level of interest rates,
which the latter will repay 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 to written certificates representing creditors’ rights, purchased by bond holders or
owned by selling products, which can be transacted at the financial markets. They include government bonds, financial bonds,
corporation bonds, commercial drafts, preferential stocks that provide fixed income without the right to share the residual
value of corporations, etc.

Stocks and Other Holding Rights   refer to the rights by stockholders and direct investors on the net assets of
corporations they invested in. Stocks refer to negotiable securities on creditor’s rights, issued by stock companies certifying
the investment by stockholders and their rights and duties depending on their stocks. Other holding rights refer to the direct
investment by institutional units to other units in forms other than stocks and negotiable securities on creditor’s rights,
including tangible assets such as land, buildings, machines and equipment, inventory, resources, etc., and intangible assets
such as trade marks, patents, rights on land use, licenses, commodity credit, and the capitals. Documents on holding rights
usually include certificates on creditor’s right, certificates 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 reserves.

Settlement Fund   refers to bank fund of financial institutions for settlement that is in the process of remittance.

Transactions Between Financial Institutions   refer to flow of capital between financial institutions, including inter-bank
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 institutions.

Current Account   includes goods, services, earnings and current transfers.

Import and Export of Goods   refer to imported 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 the purchaser’s prices paid by
importers when claiming goods at the boarder of the exporters. When the importer claim the imported goods, the goods have
been loaded in importer’s carriers or other 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 publicity, as well as film, audio and video services, royalty 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 investment.

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

Financial Account   includes direct investment, security investment and other investments.

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

Security Investment   refers to the 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 securities issued in foreign countries or in Hong Kong, Macao
and Taiwan.

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

Reserve Assets, Net Increase   refers to the 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 rights in the International Monetary Fund, and
the use of the Funds credits. The increase in the reserve assets is expressed in negative figure and the decrease in the
reserve assets is expressed in positive figure.