In the GDP accounting of China and the United States, why should "virtual rent" be implemented?Impact and cause analysis
Why should it be implemented for housing"Virtual rentals"？
In China's system of national accounts, the National Bureau of Statistics stipulates that resident-owned housing must be included in GDP accounting if it is not actually rented. The purpose of this is to ensure that investment in fixed assets is included and that the property status of urban and rural residents is accurately counted. Although in the eyes of most people, buying a house is just for personal consumption, in macroeconomics, buying a house belongs"Investment in fixed assets", so it should be included in GDP accounting. In addition, both consumption and investment must be calculated in batches over a certain period of time. Therefore, in order to be able to accurately account for the income generated by housing investment, it is necessary to implement housing practices"Virtual rentals"Accounting.
It is worth mentioning that the housing rental market in Western countries is relatively well-developed, and the virtual rent of resident-occupied houses can be estimated based on the rent of surrounding houses. In contrast, in the past, China mainly used the cost accounting method, that is, fixed depreciation based on the cost of acquiring housing. Prior to 2004, rural owner-occupied housing in China was accounted for at a depreciation rate of 2% per annum, and urban residential housing at a depreciation rate of 4% per annum. However, as China's urbanization progresses, the National Bureau of Statistics (NBS) has gradually introduced the market rent method to more accurately account for fictitious rents. Currently, except.
Outside of first- and second-tier cities, most of the cities have underdeveloped housing rental markets and are poorly representative of rental data, so the costing method is still used.
Introduce dwellings"Virtual rentals"The specific accounting method.
Housing"Virtual rentals"The accounting needs to follow a series of detailed rules and calculation methods. First of all, after 2004, the depreciation rate of urban housing in China was calculated at 2% per year, that is, it was included in GDP accounting in 50 yearsThe depreciation rate for rural housing is calculated at 3% per annum, i.e. 3333 years are included in GDP accounting and refer to the housing prices of the current year. This means that the cost of buying a home will be used as a reference when calculating the annual virtual rent based on the depreciation rate.
As an example, let's say a person bought their own house for $500,000 in 2000 and would have a fictitious income of $20,000 per year at a depreciation rate of 4% per year. However, it is important to note that virtual income is not a one-time event, but is gradually included in GDP accounting over multiple years. From 2004 onwards, the amortization period for a dwelling accounted for using the cost method will change from 50 years to 3333 years, which means that the annual amortization rate will remain the same, but the reference** will change depending on market conditions for the year. In 2010, for example, the value of a home that was initially worth $500,000 has risen to $1.5 million, so at a depreciation rate of 2% per year, the virtual rent for that year would be $30,000.
In this way, it is possible to ensure that housing investments are accurately accounted for each year and included in the system of national accounts. This method of accounting allows for a detailed accounting of the value of housing and its contribution to the economy, resulting in a more comprehensive and accurate macroeconomic analysis.
Housing"Virtual rentals"The meaning and role of the company.
Introduce housing"Virtual rentals"Accounting is of great significance and importance. First of all, it is possible to ensure accurate statistics on the country's investment in fixed assets. Housing purchase by residents is a form of fixed asset investment, and it also needs to be included in the scope of national accounts to fully understand the contribution and impact of the real estate industry to the economy.
Second, it helps to accurately measure the added value of the real estate sector and its contribution to GDP. By calculating the fictitious rent of residential housing, the added value of the real estate industry can be included in the GDP accounting, and then the contribution of the real estate industry to the national economy can be evaluated. While the number of real estate buildings in the U.S. is significantly lower than in China, the value added of the real estate industry and its share of GDP is higher than in China, because the U.S. accurately calculates the virtual rent of housing.
In addition, family housing"Virtual rentals"The application of accounting also helps to regulate the economic structure and achieve sustainable development. Through the statistics and analysis of the virtual rent data of family housing, we can better understand the supply and demand relationship of the real estate market, optimize the allocation of resources, adjust the economic structure, and promote the sustainable development of the economy.
In short, housing"Virtual rentals"Accounting is an important method of economic statistics that ensures accurate statistics on fixed asset investment and the real estate sector and assesses their contribution to the economy. Although this method of accounting may be difficult for some to understand, it is important from a macroeconomic point of view to fully understand and assess economic development.