Explanatory Notes on Main Statistical Indicators

Industry refers to the material production sector which is engaged in extraction of natural resources and processing and reprocessing of minerals and agricultural products, including (1) extraction of natural resources, such as mining, salt production, logging (but not including animal hunting and fishing); (2) processing and reprocessing of agricultural products, such as grain and oil processing, food processing, embroidery, textile manufacturing and leather making; (3) processing and reprocessing of mining products, such as iron making, steel making, chemical production, petroleum processing, machine building, timber processing; and production and supply of electric power, tap water and gas; (4) repair and refurbishment of industrial products, such as the repair of machinery equipment.

Light Industry refers to the industries that produce consumer goods and hand tools. It falls into two categories, based on different raw materials:

(1) Industries basing the raw materials on agriculture, which directly or indirectly use farm products as basic raw materials, mainly include the manufacture of foods and beverages, tobacco processing, textile manufacturing, tailoring, fur and leather manufacturing, paper making, printing, etc.

(2) Industries using non-agricultural products as raw materials, which means the manufactured goods are used as raw materials, mainly include the manufacture of cultural, educational articles and sports goods, chemical medicines, synthetic fiber, daily chemical products, glass products for daily use, metal products for daily use, hand tools, medical appliances and instruments, as well as stationery and office machinery.

Heavy Industry refers to the industries that provide material and technical foundation as key means of production for various sectors of the national economy. It falls into the following three categories according to the purpose of production or the use of products:

(1) Mining, quarrying and logging industry refers to the industry that extracts natural resources, including the extraction of petroleum, coal, metal and non-metal ores and logging.

(2) Raw material industry refers to the industry that provides various sectors of the national economy with basic materials, fuels and power. It includes smelting and processing of metals, coking and coke chemistry, chemical materials, cement, artificial boards, as well as power generation, petroleum refining and coal processing.

(3) Processing industry refers to the industry that reprocesses raw materials. It includes machine manufacturing, which equips various sectors of the national economy, metal structure, cement products, and chemical fertilizer and pesticide industry that provide means of production for agriculture.

According to the above principle of classification, the repair services for products of heavy industry are classified as heavy industry, while the repair services for products of light industry are classified as light industry.

Gross Output Value of Industry is the total value in monetary terms for final industrial products and industrial labor service provided by industrial enterprises during the reporting period. It includes the value of the finished products, which will not be further processed in the enterprises and have been inspected, packed and put in storage (except for products required not to be packed), the revenue from processing products for others, the value of semi-finished products, and the price spread between the finished products and products at the initial stage. The gross industrial output value is calculated with “factory method”; that is, to take an industrial enterprise as a whole. It calculates the final products created by the enterprise.

Added Value of Industry refers to the final results of industrial production by industrial enterprises in monetary terms during the reporting period. It shows the newly created value generated in production by the enterprises.

Sales Value of Industry refers to the total value of industrial products sold or labor service provided by an industrial enterprise during the reporting period in monetary terms. It includes the total value of all finished and semi-finished products actually sold by the enterprise (including products produced in current period and noncurrent period), revenue from processing products for others, repairing industrial products for others, as well as processing, repairing, and installing equipment for internal non-industrial departments in the reporting period. All finished and semi-finished products sold in the current period will be counted, regardless of whether they were produced in the current period or not. The value of products, industrial work and home-built equipment provided by the enterprise for its capital construction department and welfare department will also be included in the industrial sales value.

Total Assets refer to resources formed by previous transactions or matters of an enterprise, owned or controlled by the enterprise, and expected to bring economic benefits to the enterprise. Classified by the liquidity, assets fall into current assets and non-current assets. Current assets include monetary capital, tradable financial assets, notes receivable, accounts receivable, prepayment, other receivables, and inventory, etc.; while non-current assets include long-term equity investment, fixed assets, intangible assets, and other non-current assets, etc.

(1) Total Current Assets Assets that meet any of the following requirements are considered current assets: a. assets expected to be cashed in, sold or consumed in a normal operating cycle, which mainly includes inventory and accounts receivable, etc.; b. assets held mainly for transaction; c. assets expected to be cashed in within one year (including one year) from the balance sheet date; d. cash or cash equivalents with unrestricted capacity of exchanging for other assets or paying off debts within one year from the balance sheet date, which include monetary capital, notes receivable, accounts receivable, inventory, etc.

(2) Total Fixed Assets refer to tangible assets held by an enterprise for producing commodities, rendering labor services, leasing or management, with service life exceeding one fiscal year，which include houses and buildings, apparatus, machinery, means of transport, as well as other equipment, instruments and tools related to production and operation, which have a service life exceeding one year. Total Fixed Assets is a time point indicator, showing the ending balance of fixed assets after deduction and discount, and impairment provision, etc.

Total Liabilities refer to the present obligations formed by previous transactions or matters of an enterprise, expected to lead the flow of economic benefits out of the enterprise. By the term of payment, liabilities generally include current liabilities and non-current liabilities.

(1) Total Current liabilities Liabilities that meet any of the following requirements are considered current liabilities: a. assets expected to be paid off within one normal operating cycle; b. assets held mostly for the purpose of transaction; c. assets expected to be due and paid off within one year from the balance sheet date; d. assets that the enterprise has no right to delay the payment to more than one year after the balance sheet date on its own. They include short-term loans, notes payable, accounts payable, wages payable, taxes and fees payable, etc.

(2) Total Non-current Liabilities refer to liabilities other than current liabilities, including long-term borrowings and bonds payable, etc.

Total Owner’s Equity refers to the remaining equity of assets in an enterprise held by owners after deducting the liabilities. Owner’s equity of a company is also called shareholders’ equity, including paid-up capital, capital reserves, operating surplus reserves and non-distributed profits, etc.

Paid-up Capital refers to the total capital (or equity) actually contributed by investors to an enterprise, including input in various forms, such as monetary investment, physical investment and intangible assets. Categorized by investors, paid-up capital includes state capital, collective capital, legal person’s capital, personal capital, capital from Hong Kong, Macao and Taiwan, and foreign capital.

Main Business Income refers to the income from main business of selling commodities and rendering services recognized by the enterprise.

Main Business Cost refers to the total cost incurred by the enterprise during its operation of main business.

Main Business Tax and Surtax refers to the business tax, excise tax, urban maintenance and construction tax, educational surcharge to be levied against the main business operated by an enterprise.

Operating Profits refer to the profits reaped by an enterprise from its productive and operating activities.

Total Profits refer to the operating results of an enterprise during certain accounting period, representing the surplus of various incomes from production and operation deducting various expenses, reflecting the total gains and losses realized by the enterprise during the reporting period.

VAT Payable refer to the tax payable by an enterprise in current period according to provisions in Law of Tax for its activities of adding value to goods, such as selling the goods, providing labor service for processing, repair and replacement.

VAT Payable = Output Tax – (Input Tax – Transfer-out of Input Tax) – Tax Payable Deducted by Export from Output Tax of Domestically Sold Products – Tax Concession + Export Rebate

VAT Payable excludes the taxes not deducted at the beginning of the period.

Sales Rate of Industrial Products refers to the ratio of industrial sales output to the gross output value of industry during the reporting period. The following formula is used:

Sales Rate of Industrial Products (%) = Sales Value of Industry at Present Value During the Reporting Period / Gross Output Value of Industry at Present Value During the Reporting Period × 100%

Rate of Industrial Added Value refers to the ratio of added value of industry to the gross output value of industry during the reporting period. It indicates the economic benefits from reduction of intermediate consumption. The following formula is used:

Rate of Industrial Added Value = Added Value of Industry at Present Value During the Reporting Period / Gross Output Value of Industry at Present Value During the Reporting Period × 100%

Rate of Profits to Total Industrial Costs refers to the ratio of profits realized in a given period to the total costs in the same period, which reflects the economic efficiency of industrial production input. The following formula is used:

Rate of Profits to Total Industrial Cost (%) = (Total Profits/ Total Costs) ×100%

Overall Labor Productivity of Industry refers to the average final result of industrial production created by each employee within a unit time, measured with the value of products. It is an important indicator evaluating the economic activities of an enterprise, and it reflects the level of production technology and economic management of the enterprise, employees’ skills, as well as enthusiasm for work.

Overall Labor Productivity of Industry (RMB/person) = Added Value of Industry (at present value) / Average Number of Employees

Turnover of Current Assets refer to the number of times for current assets turnover within a given period of time. It reflects the turnover velocity of current assets. The following formula is used:

 Turnover of Current Assets (No. of times) = Product Sales Income / Average Balance of Current Assets

Liquidity Ratio reflects how many current assets are backing up every RMB 100 of current liabilities in an enterprise. The following formula is used:

Liquidity Ratio (times) = Total Current Assets / Total Current Liabilities

Quick Ratio indicates the capacity of an enterprise’s current assets for paying off current liabilities immediately. The following formula is used:

Quick Ratio (times) = (Total Current Assets – Inventory) / Total Current Liabilities

Assets-liabilities Ratio reflects how many assets—out of the total assets of the enterprise, are obtained by borrowing. It can be used to evaluate the enterprise’s capability of operating by using the funds provided by creditors, and to what extent the enterprise will be able to protect the creditors’ interests in the case of liquidation. The following formula is used:  

Assets-liabilities Ratio = Total Liabilities / Total Assets × 100%

Contribution Rate of Total Assets indicates the profitability of all assets in an enterprise, reflecting the operating performance and management of the enterprise. It serves as a core indicator evaluating the enterprise’s profitability. The following formula is used:

Total Assets Contribution rate = (Total Profit + Total Tax + Total Interest Expenses) / Average Total Assets × 100%

Note: the total tax is the sum of main business tax and surtax, tax in management expenses, and VAT payable; average total assets are represented by the arithmetic average of total assets at the beginning and the end of the period.

Rate of Assets Preservation and Appreciation reflects the changes in the net assets of an enterprise. It reflects the growth potential of the enterprise. The following formula is used:

Capital Preservation and Appreciation Rate = Owner’s Equity at the End of the Reporting Period / Owner’s Equity at the End of the Same Period in the Previous Year × 100%

High-tech Manufacturing Sector refers to all sectors in the high-tech industry other than software development.