New Economy Index Slips in October
High-value-added industries like information technology (IT) and financial services contributed less to China’s overall economy in October as capital inputs decreased, according to a private index released on Friday.
The Mastercard Caixin BBD New Economy Index (NEI) fell to 29.8 in October from September’s 31.3. The reading indicates that “new economy” industries accounted for 29.8% of overall economic input activities. The NEI measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.
The drop in the index was mainly due to the fall in the subindex of capital investment inputs, which dipped by 4.5 points to 34.6 in October from the previous month. Capital inputs have a weighting of 35% in the NEI.
The subindex of technology inputs, which has a weighting of 25%, picked up to 27.4 from September’s 26.7. This gauge measures the number of scientific research personnel recruited by the tracked industries, and the number of inventions they created and patents they obtained.
The subindex of labor inputs slipped slightly to 27.1 from 27.4 in September.
Launched in March 2016, the NEI defines a new economy industry as one that is labor- and technology-intensive but asset-light; experiences sustainable and rapid growth; and is in a strategic industrial sector encouraged by the government.
The new IT sector remained the top contributor among the 10 major industrial categories, making up 10.8 percentage points of the NEI’s October reading. Financial and legal services came in second, while advanced equipment manufacturing ranked third.
The average monthly entry-level salary in new-economy sectors, based on data compiled from online career and recruitment websites, was 10,150 yuan ($1,460) in October, little changed from the previous month and the lowest since November 2017.
The monthly NEI reports are compiled by Caixin Insight Group — a financial data and analysis platform of Caixin Media, and Chinese big-data research firm BBD, in collaboration with the National School of Development at Peking University.
Contact reporter Lin Jinbing (email@example.com)
Read more about Caixin’s economic indexes.
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