Census of International Trade in Services and Royalties: Year ended June 2011

Definitions

About the Census of International Trade in Service and Royalties

The census is a full coverage survey that measures the imports and exports of commercial services by New Zealand companies. Commercial services include different services such as computer, communication, financial, business and technical services, and royalties from intellectual property. These service types are further defined below.

The previous census was for the year ended June 2005. Census results provide an accurate picture of the New Zealand service sector at a point in time. The results are also used to improve the quality of the service statistics within the quarterly balance of payments information release.  

More definitions

Services: products other than tangible goods. Services result from production activity that changes the conditions of the consuming units, or makes the exchange of products or financial assets possible. Examples of services are:

  • a lawyer providing advice to an overseas client
  • a client paying a company to perform some market research
  • a passenger flying on an overseas airline
  • a company paying to have a ship repaired abroad
  • a New Zealand branch receiving management services from its head office overseas.

Audio visual services: includes production of film/television/radio, actors fees, animation, and set design.

Commercial services: refers to all services and royalties excluding travel, transportation, insurance, and government services.

Communication services: includes revenue and expenses from postal and courier services, Internet access, fixed and mobile phone services, network services, and transmission services.

Computer services: includes providing IT expertise, designing or developing customised software, managing IT infrastructure, and sales of non-customised software made online. Excludes sales of non-customised software where it is delivered in a physical medium (for example, anti-virus software on a CD).

Construction services: includes the creation, renovation, and repair of buildings and other construction such as bridges or roads. Excludes any work completed abroad by overseas subsidiaries, branches, or offices.

Exports of travel services: covers all expenditure on both goods and services by overseas visitors to New Zealand. This includes holidaymakers, business travellers, and international students. Excludes international airfares.

Imports of travel services: covers all expenditure on both goods and services by New Zealand-resident travellers while overseas. Excludes international airfares.

Exports of transportation services: revenue earned by New Zealand companies from carrying passengers and freight internationally, as well as administration and port expenses received from foreign airlines/shipping companies operating in New Zealand.

Imports of transportation services: expenditure by residents departing New Zealand on overseas airlines, freight payments, and administration and port expenses paid abroad by New Zealand-resident airlines/shipping companies.

Financial services: services relating to transactions of financial instruments. For example:

  • a New Zealand stockbroker charging a fee to a foreign client for trading shares
  • an investment manager providing advice on a proposed merger and acquisition
  • a non-resident bank charging a fee for foreign exchange transactions made by a New Zealand company.

News and information services: includes revenue/expenses related to accessing a database, subscriptions to newspapers or periodicals, and news monitoring services.

Contract manufacturing: fees paid/received for transforming a good into a finished product. For example, a New Zealand company sending wool abroad (retaining ownership of the wool) where it is processed into scarves by an overseas company for a fee.

Management fees between related parties: fees commonly charged by a parent company to its subsidiaries. New Zealand companies will import (pay) management fees from overseas parents, and export (receive) management fees from overseas subsidiaries. Management fees between related parties include charges for managerial and administrative services, and charges for accounting, computer services and royalties. These are often invoiced collectively and cannot be separated by some survey respondents. As a result, imports and exports of management fees cover a range of business services.

Merchanting: goods purchased abroad, and then sold abroad without these goods entering New Zealand. Purchases are collected as imports of merchanting services, while sales are collected as exports of merchanting services. Data is reported on a net basis as merchanting exports only.

Mode of supply: examines where and how a service transaction takes place. The 2010 Manual of Statistics on International Trade in Services (MSITS) defines four modes of supply:

Cross border (mode 1) supply takes place when a service is supplied from the one country into the territory of another country. This is similar to trade in goods where the product is delivered across borders and the consumer and the supplier remain in their respective territories (eg an architect in New Zealand providing plans and advice to a client in Singapore, through one or more communication media – Internet/phone/fax/mail).

Consumption abroad (mode 2) describes the process by which a consumer resident in one country moves to another country to obtain a service (eg a tertiary student from Hong Kong travelling to New Zealand to study). Services such as ship repair abroad, where only the property of the consumer moves, or is situated abroad, are also covered by this mode.

Commercial presence (mode 3) applies where an enterprise establishes a foreign affiliate/subsidiary abroad in order to deliver services internationally (eg a New Zealand engineering firm establishing a branch in China to provide engineering services to Chinese customers).

Presence of natural persons (mode 4) is when an employee or individual temporarily travels overseas to provide a commercial service to a foreign client. Employees can travel overseas under different arrangements. These could be short-term excursions or corporate transfers/secondments to work in an overseas branch (eg a self-employed business consultant travels overseas to provide business advice; a computer programmer is transfers temporarily to work in an overseas branch of the New Zealand employer; or an engineer is contracted to work on an overseas building site).

Royalties: compensation for the use of property (usually copyrighted works, patented inventions, or natural resources). For example:

  • a band has their CD produced by a record label and they receive a proportion of the profits from each CD sold
  • an inventor owns a patent on a new product and receives a proportion of the profits from each item sold.

The service type used in table 8 differs from that used in tables 1 and 2. The modes of supply were collected under a different classification, which is explained below:

  • Information and communication technology services – includes computer and communication services.
  • Financial services – includes asset management fees and financial advisory services
  • Trade and sales services – includes advertising, merchanting and contract manufacturing.
  • Business services – includes accounting, legal, consultancy and management fees between related parties.
  • Entertainment and recreational services – includes motion picture production, radio, TV and other artistic services.
  • Technical and professional services – includes engineering, technical testing, research and development, mining and repair services.
  • Intellectual property – includes royalties from; software, broadcast rights, musical works, brands, patents and trademarks.
  • Miscellaneous services – includes education, health and conference and presentation services
  • Services not elsewhere classified.