Reconstructing China's Supply-Use and Input-Output Tables in Time Series

This paper documents the procedures of constructing China's input-output tables (IOTs) and supply-use tables (SUTs) in time series for the period 1981-2010 under the East Asian Industrial Productivity/China KLEMS Project. We begin with basic data problems in terms of inconsistencies in concept, coverage, and classification of Chinese national accounts (NAs) and biases of using the NA implicit gross domestic product (GDP) deflators. We then introduce the key procedures in: 1) reconstructing national production accounts as national and industry-level "control totals", 2) constructing industry-level producer price indices, 3) converting 1981 material product system (MPS)-type IOT to the system of national accounts (SNA) standard to match China's five full-scale IOTs (1987, 1992, 1997, 2002 and 2007), 4) constructing industry-level export and import accounts to match each benchmark IOT, and 5) estimating supply-use tables in time series using the SUT-RAS approach from the World Input-Output Database (WIOD), and based on the estimated SUTs, we finally derive China's input-output accounts in time series. Furthermore, we adopt the chained-Laspeyres deflation approach to estimating SUTs in constant prices. With these procedures, we have arrived at an annual GDP growth rate of 9.4% instead of the official estimate of 10.2% for the full period. However, at the broad-sector level, we show a much faster industrial GDP growth at 15.6% per annum instead of the official estimate of 11.9% per annum. As for non-industrial GDP growth, our estimate is 5.2% per annum rather than the official estimate of 8.9% per annum.