GDP is the size of the economy at a point in time

GDP measures the total value of all of the goods made, and services provided, during a specific period of time.

Goods are things such as your new washing machine, or the milk that you buy. Services include the haircut from your hairdresser, or repairs done by your plumber.

It’s only final goods and services that are sold to you and me that matter for GDP though. So if some tyres roll off a production line and are sold to a car manufacturer, the value of the tyres isn’t included in GDP, it is reflected in the value of the car.

The amount you pay, or the market value of that good or service, is what’s important as these are added together to get GDP.

UK GDP includes goods and services produced in the UK

Gross Domestic Product means that GDP is only measuring things that are produced within the borders of the UK.

This is important, because if a British company is producing cars in China, they’re not contributing towards UK GDP.

Sometimes people use the phrase Real GDP

This is because GDP can be expressed in nominal or real terms. Real GDP takes the value of goods and services produced in the UK, but it takes into account changing prices to remove the effect of rising prices over time, otherwise known as inflation.

Real GDP is otherwise known as the ‘constant price’ measure of GDP.

Nominal GDP still measures the value of all the goods and services produced in the UK, but at the time they are produced.

It is otherwise known as the ‘current price’ measure of GDP.

There’s more than one way of measuring GDP

Just imagine trying to add together the value of everything made in the UK – that’s no easy feat, which is why there is more than one way of measuring GDP.

GDP is calculated three ways, adding up:

• all the money spent on goods and services
• the money earned through wages and profits
• the value of goods and services produced

These are known as the expenditure, income and output measures of GDP, respectively. All three different methods of calculating GDP should, in theory, give the same number.

In the UK, we get a new GDP figure every 3 months

So if the GDP figure is higher than it was in the previous 3 months – the economy is growing.

If it’s lower – the economy is getting smaller.

The Office for National Statistics (ONS) is responsible for calculating the GDP figure for the UK. Naturally it collects a lot of data from a lot of different sources to do this. It surveys tens of thousands of UK firms working in manufacturing, services, retail and construction, as well as using a wealth of administrative data.

You might have heard people refer to the first or second estimate of GDP

The ONS calculates GDP using each of the expenditure, income and output measures of GDP. The first estimate is just the output measure, with expenditure and income measures added from the second estimate.

The UK is one of the fastest countries in the world to compile the first estimate, although to do this it doesn’t have all the data it needs for a complete picture.

At this point, the ONS has only gathered about 40% of the information it needs – so this can be revised at the second and third estimates, when they have gathered more information. GDP can also be revised at a later date due to changes in the methods for estimating it, or to incorporate less frequent data.

GDP matters because it shows how healthy the economy is

Rising GDP means the economy is growing, and the resources available to people in the country – goods and services, wages and profits – are increasing.

A report released on Wednesday shows that the number of Chinese think tanks has grown rapidly in the world during the past year.

Wang Huiyao, president of CCG, delivers a speech at the release of 2016 Global Go To Think Tank Index Report in Beijing, on Jan 25, 2016. [Photo provided to chinadaily.com.cn]

Nine Chinese think tanks were included among the world’s top think tanks in the 2016 Global Go To Think Tank Index Report, published by the think tank and civil societies program at the Lauder Institute of University of Pennsylvania (TTCSP).

Selected from a list of 175 top think tanks in the world, these nine think tanks are China Institutes of Contemporary International Relations; Chinese Academy of Social Sciences; China Institute of International Studies; Development Research Center of the State Council; Shanghai Institute for International Studies; Institute of International and Strategic Studies Peking University; Unirule Institute of Economics; Center for China and Globalization; and Chongyang Institute for Financial Studies, with China Institute of Contemporary International Relations ranking the highest at 33.

The report shows the United States at the top with the largest number of think tanks, at 1,835, while China holds the second place with 435, followed by UK, 288, and India, 280.

The 2016 study was subdivided into 52 lists based on such categories as region, area of research and special achievement, in which 41 Chinese think tanks were selected with 18 of them also outstanding in the Top Think Tanks in China, India, Japan and the Republic of Korea.

“It’s very meaningful that a number of Chinese think tanks are influencing the world,” said Wang Huiyao, president of the Center for China and Globalization. “More think tanks are needed to help our government in making decisions accurately and scientifically. Meanwhile, think tanks serve more like a ‘soft power’, which can also help enhance our country’s international stature,” he said.

According to the report, three Chinese thinks tanks have made their mark Think Tanks to Watch. They are Shanghai Advanced Institute of Finance, Unirule Institute of Economics, and Center for China and Globalization.

Another four are among the Best New Think Tanks, including Alibaba think tank, 21st Silk Road Collaborative Center, Qianhai Institute for Innovative Research, and Center for Eco-Financial Studies, with Alibaba think tank ranking the highest at 23.

Referred to as “think tanks’ think tank”, TTCSP manages and supports a global network of close to 7,000 think tanks and trains future think tank scholars and executives.

“Since 2006, our ranking process has been refined and streamlined, and the number and scope of the institutions and individuals involved has steadily grown.” said James McGann, director of the TTCSP.

The 2016 report shows continued expansion of think tanks in Asia, Latin America, Africa, the Middle East, and North Africa.

Besides, there is increasing diversity among think tanks in these regions with independent, political party affiliated, and corporate and business sector think tanks that are being created with greater frequency.

A Chinese woman who ran a small recreational shooting gallery in north China’s Tianjin Municipality has received a suspended three-year prison sentence for illegal gun possession.

The sentence was handed down by Tianjin No. 1 Intermediate People’s Court.

Zhao Chunhua, 51, opened a roadside shooting gallery to help support her family but was arrested in October. Among the model guns seized from her stall, six were identified as real guns.

She was sentenced to three and a half years in prison for illegal gun possession by a district court in Tianjin in December last year, triggering a public outcry, with many calling the verdict harsh. It caused widespread debate about the criteria for legally defining guns.

The Intermediate People’s Court took over the case after Zhao appealed against the initial verdict.

According to the court, Zhao knew that the model guns could cause injuries and could not be purchased through legal channels, therefore, she had the subjective intention to possess them.

Given that Zhao showed remorse and the guns she owned were for recreational shooting, posing little threat to society, Zhao was given a three-year probation.

Zhao pleaded guilty and was immediately released.

Some commentators are surprised. The new President is doing exactly what he said he would do. The worldly wise well educated pontificators  who confidently predicted Mr Trump would metamorphose in office to someone more like the various well honed expert politicians he defeated are having to change their minds.

Mr Trump told us he did not accept the idea that the US has to place climate change at the centre of its industrial and economic policies. References to that set of policies and beliefs have been taken down from the White House website. Instead Mr Trump has taken executive actions to make it easier to exploit US hydrocarbons and transport oil to market by pipeline. He understands cheap energy is an essential underpinning of an industrial strategy.

He told us he would get US corporations to invest much more in the USA. There has been a procession of business leaders in to see him to be asked to step up their domestic investment. Doubtless they have been told they will get tax cuts and regulatory changes to make the US more competitive. They will also have seen the reputational damage if they do not make suitable statements about their commitment to US manufacture. The car makers are now planning more capacity in the USA.

He has said he wishes to control inward migration, and to tackle the problem of foreign criminals operating in the USA. He has made some executive orders and is investigating his further options over the Mexican frontier.

He expressed hostility to multilateral trading agreements that he thought were not fair on the USA. He has pulled the USA out of the Trans Pacific Partnership, a complex large agreement which was not ratified by Mr Obama. He has begun the process of renegotiating NAFTA where he thinks Mexico has un unfair advantage. As this is ratified he will need to deal with the Congress on how to proceed.

The critical commentators will probably shift their ground from proposing he will change, to arguing the realities of government  and the limits on Presidential power will now prevent him doing much of what he promised. It is true his tax cuts require action and goodwill by Republican Congressmen and women. Repeal of Obamacare and changes to existing trade treaties will need the approval of the legislature. Mr Trump is at his most powerful in his early days as President, and all the time there is a Republican majority in the Senate and Congress. He may again surprise his critics by being able to cut deals with the legislators to secure tax cuts, Obamacare change and other important items in his manifesto.

Mr Obama came to office promising to shut Guantanamo, pull out of Afghanistan and press for peace in the Middle East. He got wobbled off all of those and defined his Presidency by securing a deeply unpopular healthcare reform. Mr Trump needs to make sure when he spends his political capital with the legislators he buys something worth having which makes them and him more popular.  Tax cuts might well do just that. The replacement for Obamacare may prove more divisive and difficult.