Recently, the application of the input-output (I-O for short) approach at the regional level (which implies province, municipality, autonomous region, and city) has been promoted heavily in China. The compilation of the earliest regional I-O table can be traced back to 1962 in which researchers from the Department of National Economy Balance of Economic Research Institute at Chinese Academy of Sciences (now known as the Department of National Economy of Economic Research Institute at Chinese Academy of Social Sciences, or CASS) investigated the issues and undertook a trial of compiling the regional I-O table in Shanxi Province. They drew up a report entitled “Survey on the conditions of compiling the inter-sector balance table in Shanxi Province”. The survey noted:

In order to strengthen economic plans and advance comprehensive balance of national economy, we must improve approaches to planning by drawing the previous experiences in addition to adhering to the rules of planned and proportionate development of national economy and appropriately implementing the guidelines, principles and policies of Chinese Communist Party. On the one hand, we need to effectively make use of the balance method and the balance table applied in the past and, on the other hand, further promote the application of inter-sector balance table.

They not only examined the objective conditions (e.g. whether the internal economic structure was all-inclusive and the external economic relationship was unsophisticated) and subjective conditions (e.g. whether there was a supportive base for planning and statistics) for compiling the balance table in Shanxi Province, but also investigated in great detail the gap between the existing planning and statistics 51systems and the requirements for compiling the inter-sector balance table. They came to the following concluding remarks:

There are basic conditions to experimentally compile the inter-sector balance table based in Shanxi Province, and there is relatively a large gap between the conditions under which experimental compilation and the actual practice of planning and statistics are concerned. However, as long as we appropriately streamline the inter-sector balance table and lessen the compilation requirements on the one hand and raise the level of planning and statistics as much as possible and make necessary modification in terms of compilation methods on the other hand, this gap can be narrowed at both ends.

The experimental compilation of the regional I-O table was entirely halted due to a number of factors, especially the interference and destruction caused by the ten-year turmoil brought about by the Cultural Revolution. In 1979 with the improved situation which resulted from the policy ‘Bringing order out of chaos’ made at the Third Plenary Session of the 11th CPC Central Committee, Shanxi Province started again to deliberate on compiling the regional I-O table assisted by the Department of Quantitative Economics, Economy Research Institute (which is now known as Institute of Quantitative &Technical Economics) at CASS and the Department of Planning and Statistics at Renmin University of China.