C.3. Manufacturing services surveys

6.36.        Manufacturing services on physical inputs owned by others (or manufacturing services in short) include activities such as processing, assembly, labelling and packaging, undertaken by enterprises without ownership of the goods. The BPM6 Compilation Guide provides a sample questionnaire on manufacturing services (model survey form 7, in appendix 8).

6.37.        If imports of manufacturing services are important for the compiling economy, a survey can be used to collect data from the owners of the goods on the processing fee they paid to non-resident processors (which may incur a cost for materials procured by the processors for use in production). In addition, data on the costs and origins of materials supplied by the resident enterprises (owners) to the non-resident enterprises (processors) for outward processing should also be collected. This covers both cases in which owner’s materials are sent to the processor’s economy directly from a third economy and from the owner’s home economy. It may be difficult to identify the population involved in such activities. To identify enterprises possibly involved in processing activities, exports declarations (when sending goods for processing) or import declarations (when receiving processed goods) from the customs authorities could be used. The identified enterprises can then be surveyed to collect various data on the fee and the goods involved in outward processing.

6.38.        The enquiries also need to identify the cases where processed goods do not enter or return the economy of the owner (i.e. they are sold in the economy of the processor or to a resident of a third economy). If relevant, the survey could go beyond manufacturing services and also cover merchanting, as well as other trading type activities in which there may or may not be some processing component. The sales values and various cost components of the goods for different types of global production arrangements could therefore be captured for all types of cases, including those in which such transactions with non-residents are completed offshore.^[1]

6.39.        For exports of manufacturing services on goods owned by non-residents, the data collection must cover at least the processing fee and the identification of the country of the client as well as the costs and origins of materials procured by the resident processors. If it is available, information on the destination of the processed goods is useful.  In principle, a survey of processors should be easier to establish as (a) the number of service providers should be small and (b) many of those are often located in special zones, such as export processing zones, and are generally subject to special tax regimes. The survey will have to distinguish the rendering of manufacturing services to non-residents from manufacturing on the processor’s own account and or for other residents.

Include page: Country experience: Hong Kong, China

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