New Economy Index Dips in December

*High value-added sectors made up less of China’s overall economic inputs in December as capital inputs declined

* The average monthly entry-level salary in new-economy sectors was 10,286 yuan ($1500.4) in December, 74 yuan higher than in November.

(Beijing) — The share of high value-added industries such as biotechnology, advanced-equipment manufacturing and financial and legal services in China’s overall economic inputs dropped in December as capital inputs decreased, a private index showed Wednesday.

The Mastercard Caixin BBD New Economy Index (NEI) fell to 29.1 in December from November’s 31.3. 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 in all industries.

The drop in the index was mainly due to a fall in the subindex of capital inputs, which fell to 32 in December from 37.1 in the previous month. Capital inputs have a weighting of 35% in the NEI.

The subindex of technology inputs, which has a weighting of 25%, decreased to 27.6 in December from 29.3 in November. 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 marginally to 27.5 from 27.6 in November.

Launched in March 2016, the NEI 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.

Among the 10 tracked industries, the new information and technology sector remained the top contributor, making up 11.3 points of the NEI’s reading, down by 0.8 points from November. Biotechnology came in second while advanced equipment manufacturing ranked third. The ranking of financial and legal services dropped to seventh from second in November.

The average monthly entry-level salary in new-economy sectors, based on data compiled from career and recruitment websites, was 10,286 yuan ($1500.4) in December, 74 yuan higher than in November. 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 Liu Jiefei (jiefeiliu@caixin.com)

Read more about Caixin’s economic indexes.