Caixin, Yili, BBD Launch Index to Track How Chinese Spend Their Money

(Beijing) — A new index that aims to capture the evolving consumption habits of affluent Chinese consumers was launched Tuesday.

The Yili New Economy Consumption Index (NECI), which is still in beta testing, is jointly compiled by dairy producer Yili Group, Caixin Media Group and big-data compiler BBD, the companies said at a joint news conference.

The index tracks two trends — consumption quality and consumption allocation — based on Chinese government statistics and data from e-commerce platforms.

The NECI’s launch comes at a time when China is trying to transform its economy to be more driven by consumption, rather than credit-fueled investment.

The consumption quality sub-index measures how much the population is shifting toward consuming higher-quality goods and services over time. It stood at 102.1 in May, up from 102 in April and 100 in March.

The increasing number means the population consumed more higher-quality goods and services from March to May.

The consumption allocation sub-index measures how various income groups change their expenditure allocation over a range of goods and services over time. The sub-index showed that Chinese consumers spent more on education, recreation and health care, and less on food, alcohol and tobacco over the March-May period.

Consumption has been a major growth driver for China's economy since 2014. It accounted for 64.6% of China’s gross domestic product growth in 2016, up 4.9 percentage points from 2015, according to data from the National Bureau of Statistics.

“First-tier cities are taking the lead in this upgraded consumption pattern,” said Wang Zhe, senior economist of Caixin Insight Group, who spoke at the news conference. “The small cities will soon follow.”

Contact reporter Pan Che (chepan@caixin.com)