New Capital Estimates for China

Carsten Holz

Macroeconomics from University Library of Munich, Germany

Abstract: Data on physical capital are an indispensable part of economic growth and efficiency studies. In the case of China, economy-wide fixed asset series are usually derived by aggregating gross fixed capital formation (net of depreciation) over time, and sectoral/ownership-specific series by correcting the limited official fixed asset data available. These procedures, to varying degrees, ignore that (i) gross fixed capital formation does not equal investment, (ii) investment does not equal the value of fixed assets newly created through investment, (iii) depreciation is an accounting measure that bears no necessary relation to changes in the production capacity of fixed assets, (iv) official fixed asset data, where available, incorporate significant revaluations in the 1990s, and (v) “net fixed assets” do not measure the contribution of fixed assets to production. This paper derives economy-wide fixed asset values for 1953-2003, correcting for these shortcomings. It uses both the traditional, cumulative approach and a new, so far unexplored method of combining economy-wide depreciation values and an economy-wide depreciation rate to directly yield economy-wide fixed assets. The derived fixed asset time series are evaluated in a comparison with each other as well as with series in the literature, leading to the recommendation of a specific choice of fixed asset time series.

Keywords: Capital; investment; national income accounting; production function estimations; Chinese statistics; fixed assets; measurement of economic growth (search for similar items in EconPapers)
JEL-codes: C80 D24 E22 O47 P23 P24 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2005-12-02
New Economics Papers: this item is included in nep-cna, nep-dev, nep-mac and nep-tra
Note: Type of Document - pdf; pages: 50
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https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0512/0512001.pdf (application/pdf)

Related works:
Journal Article: New capital estimates for China (2006)
Working Paper: New Capital Estimates for China (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0512001

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