New Economy’s Slump Ends in March
A private index that aims to gauge the size and changes in China’s new economy using big data rose for the first time in three months in March, buoyed by growth in technology inputs.
The Mastercard Caixin BBD China New Economy Index (NEI) edged up to 31.3 from 29.8 in February, indicating that new-economy industries accounted for 31.3% of total economic inputs used to make goods and services in March. It was the index’s first increase since December.
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 — and features sustainable and rapid growth. The definition also includes strategic new industries that the government is encouraging. The NEI measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.
The headline reading increased in March mainly on the back of growth in the technology input subindex. The subindex jumped to 33.6 in March after falling to 29.7 in February from January’s 34.4. The subindex accounts for 25% of the NEI.
Meanwhile, the capital input subindex, which makes up 35% of the NEI, remained on an upward trajectory, rising to 33.1 in March from 31.7 in February, according to a report compiled by big-data research firm BBD and Caixin Insight Group, Caixin Media’s financial data and analysis platform.
The labor input subindex, which accounts for 40% in the NEI, edged up to 28.3 in March from February’s 28.2.
The 10 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, scientific research and high-tech services, biotechnology, financial and legal services, advanced equipment manufacturing, as well as culture, sports and entertainment.
In March, the new IT industry remained the biggest contributor of the 10 categories, contributing 10 percentage points of the NEI’s reading last month, despite a 0.5 percentage point drop from February.
The scientific research and high-tech services industry grew the fastest in March, according to the report. It contributed 9.3 percentage points to the NEI headline number, making it the second-largest contributor.
The new-energy industry suffered the biggest drop-off in the ranking, falling to ninth place in March from sixth in February — accounting for only 0.5 of a percentage point to the headline figure.
The average entry-level monthly salary in new economy sectors, based on data compiled from online career and recruitment websites, dropped 4.5% month-on-month to 10,265 yuan ($1,634) in March, marking its first drop since May.
The new-economy industries provided marginally greater traction for the country’s job market, as the data showed employment in the those industries grew to 27.7% of total hiring in the economy in March, up from 27.6% in the previous month.
For more on Caixin’s economic indexes, click here.
Contact reporter Pan Che (firstname.lastname@example.org)
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