Social Sciences in China (Chinese Edition)

No. 8, 2022

 

China’s Virtual Economy and Calculation of the Scale of Its Added Value: From the Perspective of Sources of National Income

(Abstract)

 

Zhao Wen and Zhang Juwei

 

According to the principles of national income accounting, the sources of national income can be divided into new wealth and existing wealth. Considering the transfer of existing wealth as the creation of new wealth and including it in net value added will statistically exaggerate the share of net value added in GDP, and will inevitably produce new contradictions in income distribution trends. The essential attribute of the virtual economy is to transfer, not create, wealth. On this basis, we re-calculated the scale of value added it provides. We found that from 2006 to 2018, the proportion of the virtual economy’s gross value added in national GDP was between 3.87 percent and 5.39 percent, and the proportion of the virtual economy’s net value added in national GDP increased from 0.86 percent to 1.80 percent. Both showed an overall upward trend. Therefore, governments should allow the virtual economy to play its role in the concentration of wealth through fiscal and taxation policies. At the same time, however, what is more necessary is for the government to be vigilant and restrain the virtual economy’s adverse impact on income distribution.