The National Bureau of Statistics (NBS) mentioned in the revision of China's National Accounting System (2016) that if the self-owned housing of residents in China's urban and rural areas is actually leased, it will be included in the service industry and included in the scope of national accounts.
If ordinary people only live in the house they have purchased, and there is no actual leasing behavior and no actual rent payment, they also need to "make a virtual rent" and include it in GDP accounting. Among them, the rural areas are based on the cost method, and the urban areas are gradually implementing the market rent method.
This has long been popularized in Europe and the United States, which is why the number of real estate construction in the United States is obviously much lower than that of China, but the added value and proportion of GDP created by its real estate are higher than that of China.
At present, China's virtual rent accounting for urban residents' self-owned housing should gradually "move from the previous cost method to the market rent method". So to what extent is this step-by-step, the National Bureau of Statistics has given a clear answer to Nansheng's question.
Nansheng speculated at that time that there were three possibilities, one of which was that the rental market for self-owned housing of residents in various urban areas in China was not perfect and there was a lack of data. Although the National Bureau of Statistics has proposed to implement it gradually, the cost method is still used in various localities based on the actual situation.
The second is that all regions have responded positively to the proposal of the National Bureau of Statistics and have fully implemented itA third possible response is somewhere in between, i.e., some economically developed cities have taken the lead in implementing it, while others are still using the old approach.
In the end, the reply of the National Bureau of Statistics to Nansheng was the third type: except for the first and second-tier cities (as shown in the figure above), most of China's urban housing rental markets are not developed enough, the proportion of rental housing is relatively low, and the rental data is weakly representative, so we still use the cost method for accounting.
In the face of this kind of reply, some netizens find it difficult to understand: most people's houses are only lived in by themselves, and who will pay the rent of the house they live in?It's clear that no rent has been paid, and no one has received the rent, so why should it be calculated as GDP, which is obviously nonsense.
Nansheng will answer this question
In the minds of most netizens, buying a house is consumption, but in macroeconomics, this belongs to "investment, and it is fixed asset investment". Both consumption and investment need to be included in the scope of GDP accounting. However, the investment in fixed assets needs to be split into n years and calculated in batches.
And investment, corresponding to income. For those who buy a house and rent it out, rent is the income from housing investmentBut for those residents who buy houses for their own living, how should this income be accounted for and counted?
The rental market in Western countries is relatively perfect, and residents can refer to the rent of surrounding types of housing for their own housing, and then make a virtual rent. In the past, we mainly used the cost method of accounting, and we have also experienced two different periods of cost method accounting rules.
Prior to the first national economic census in 2004, the depreciation of rural residents' own housing in China was 2% per annumUrban dwellers own their own housing at 4 per cent per annum, and it is based on the "original cost of purchasing a house".
Suppose a person is an urban resident and bought his own house in 2000 at a total cost of 500,000 yuan. According to the 25-year average distribution, that is, depreciation is extracted at 4% per year, which is 20,000 yuan - this is the virtual rent calculated by the cost method, which is worth 20,000 yuan per year.
If it is not calculated, it is equivalent to the purchase of self-owned housing by residents, which is not included in the GDP accounting, which is obviously unreasonable. It should be noted that although the house you buy is very expensive, it is not fully included in the GDP accounting within a year, but must be depreciated every year and included in the accounting in batches.
Since 2004, the depreciation of urban residents' own housing in China has been calculated at 2% per annum, that is, it will be included in GDP in batches according to 50 years;The self-owned houses of rural residents are depreciated at 3% per annum, that is, at 3333 years are included in the GDP accounting in batches, and it is based on the current year**.
Please note that it is a reference to the current year**, which is still the above example as an example, after 2004, it is not according to the original 500,000 yuan as the depreciation denominator, but changes.
Let's say that in 2010, the original 500,000 yuan house is now worth 1.5 million yuan. That is, 1.5 million yuan is multiplied by the depreciation ratio of 2% per year to obtain a virtual rent of 30,000 yuan under the cost method for the current year.
You see, it's a mistake not to rent a fictitious rent
The house you bought for 5 million yuan in 2023 is only counted at 2% depreciation this year, not all of it will be counted in this year's GDP. If there is no virtual rent, it means that the self-owned housing purchased by Chinese people is not included in the scope of national accounts, which is wrong and underreported.
This is not "their own business" for residents' own housing, and office supplies such as factories, freight cars, computers, machinery and equipment purchased by enterprises must be depreciated every year and included in GDP statistics in batches, rather than being included in GDP at one time. This article is written by Nansheng, please do not plagiarize without authorization!