Transformations  in
Business & Economics

REVISITING CHINA'S NET CAPITAL STOCK AND FIXED CAPITAL CONSUMPTION FOR TEN TYPES OF ASSETS: AN IMPROVED METHODOLOGY FOR 1978-2016
Facang Zhu, Wencang Hu, Chonghui Zhang

ABSTRACT. Capital is an important input accounted for in productivity analysis. Investment flows are important in measuring the capital stock, and they should be broken down by type of assets. Departing from the existing literature, this paper divides the capital assets into ten types, and simulates their specific average age-efficiency profiles, age-price profiles, and age-depreciation rate profiles. Then, a method to calculate the net capital stock and consumption of fixed capital is proposed. Capital account is compiled to describe the dynamic process and structural characteristics of capital. The case of China is considered. The results show that China's net capital stock and consumption of fixed capital have increased significantly and the capital wealth structure has changed gradually. These findings will help to improve China's capital accounting system at the national and province levels.

KEYWORDS:  perpetual inventory method, net capital stock, consumption of fixed capital, capital account.

JEL classification:  M14, M19, P2.

⁶Acknowledgment:  National Social Science Major Bidding Project 16ZDA053 and General Project 18BTJ037. Support of Zhejiang Province's first-class discipline A (Statistics of Zhejiang Gongshang University) is acknowledged