Discussion Papers

No.833 Estimation of China’s Investment in ICT Assets and Accumulated ICT Capital Stock

by David Tao Liang, Harry X. Wu, Kyoji Fukao

March 2022


Despite the extraordinary impact of information and communication technologies (ICTs) on the Chinese economy, no systematic information is provided on ICT investment by Chinese official statistics. We make the first attempt to estimate such investment using China’s total investment in equipment by industry controlled by China’s national accounts, constructed by the CIP (China Industrial Productivity) Project, and the relationship between the ICT equipment investment and ICT service intermediate input, as observed in the Japanese economy. We show that over the entire period from 1978 to 2018, China’s investment in the ICT equipment grew by 21.8 percent per annum, which was nearly twice the investment in non-ICT equipment. The share of the ICT investment in China’s nominal GDP peaked in 2002 at 2.7 percent, then declined to approximately 1 percent in the recent years. Similarly, the ICT investment share in the nominal gross fixed capital formation (GFCF) peaked in 2002 at 7.7 percent and then declined to 2.4 percent in 2018, largely attributable to the government’s unprecedented investment in infrastructure to sustain growth. By 2018, China’s ICT intensity, measured as the share of the ICT equipment in the total equipment stock, had reached 10.6 percent, approximately 65 percent that of Japan (16.4 percent in 2015) and 71 percent that of the US (15.0 percent in 2017). In sectoral comparisons, we show that China’s service sector is more-ICT intensive (17.3) than its industrial sector (5.4), a pattern similar to, but with a narrower spread than that in Japan (25.8 vs. 4.5 in 2015), and the US (21.1 vs. 3.8 in 2017).

Keywords: information and communication technologies (ICTs); ICT investment; ICT capital stock; input-output tables.

JEL classification: C82, E22, E24

Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.