New Economy Accounts for Greater Share of Inputs in November, Caixin Report Shows
The share of high-value added industries such as biotechnology, advanced-equipment manufacturing and financial and legal services in China’s overall economic inputs rebounded for the first time in three months in November, a private index showed Saturday.
The Mastercard Caixin BBD China New Economy Index (NEI) shows that new economy industries accounted for 30.2% of total economic inputs used to make goods and services last month, up from 29.3% in October.
The index aims to track the size of, and changes in, China’s nascent industries using big data. It measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.
The November reading was the highest in three months and marked the index’s first rebound since August.
The rise in last month’s NEI was underpinned by a solid jump in capital input, one of the three subindexes of the indicator. Both the labor input and the technology input subindexes slid moderately in November from the previous month, according to the report compiled by Caixin Insight Group, the financial data and analysis platform of Caixin Media, and big-data research firm BBD, in collaboration with the National Development School of Peking University. The index is sponsored by global payments service provider Mastercard.
The NEI, launched in March 2016, defines a “new economy” industry as one that is labor and technology intensive but has a relatively low ratio of fixed capital, has sustainable and rapid growth, and is one of the strategic new industries encouraged by the government. The industries included in the index are: energy conservation and environmental protection, new energy, new-energy vehicles, advanced materials, new information technology (IT) and information services, high-tech services and research and development, biotechnology, financial and legal services, advanced equipment manufacturing, and culture, sports and entertainment.
The new IT industry continued to be the number one contributor among the 10 major industrial categories, making up 11.6 percentage points of the NEI reading last month, up from 10.4 percentage points in October and the highest share since July. It was the second-straight month the share of the sector has increased.
Biotechnology was the second, contributing 4.0 percentage points. It was followed by energy conservation and environmental protection, which made the third-largest contribution of 3.9 percentage points.
The Chinese government has been intensifying its nationwide campaign this year to reduce pollution, which has led to stricter controls on production by high energy-consuming and polluting industries such as coal, steel and aluminum. One of the government’s requirements is for enterprises to upgrade their emission-cleaning facilities, which could have benefited the environmental protection industry.
The average monthly entry-level salary in new economy sectors, based on data compiled from online career and recruitment websites, rose 1.7% from October to 10,122 yuan ($1,531) in November and enjoyed a premium of 4.8% over entry-level salaries in the economy as a whole. Hiring in new economy sectors inched down to 29.2% of total hiring in the economy in November from 29.4% the previous month.
Contact reporter Fran Wang (firstname.lastname@example.org)
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