New Economy Index Slips to 20-Month Low

The contribution of high value-added industries to China’s overall economic inputs dropped to a 20-month low in January, as both capital and labor inputs in the industries decreased, a private index showed Saturday.

The Mastercard Caixin BBD New Economy Index (NEI) dipped to 28.8 in January from the previous month’s 29.1, indicating that new-economy industries accounted for 28.8% of China’s overall economic input activities — the lowest reading since May 2017. The index measures labor, capital and technology inputs in 10 emerging industries relative to those in all industries.

Among the three subindexes that make up the NEI, the one for capital inputs recorded the biggest decline, falling 0.6 points from the previous month to 31.4 in January. Capital inputs have a weighting of 35% in the NEI. The subindex for labor inputs, which have a weighting of 40%, dropped 0.4 points to 27.1.

The subindex for technology inputs rose 0.4 points to 28. 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.

Launched in March 2016, the NEI defines a new-economy industry as one that is labor- and technology-intensive, asset-light; experiences sustainable and rapid growth; and is in a strategic new sector encouraged by the government.

Among the 10 tracked industries, the new information technology industry remained the top contributor, making up 10.9 percentage points of the NEI’s reading, down 0.4 percentage points from the previous month. Biotechnology 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 10,541 yuan ($1,564) in January, 255 yuan higher than the previous month.

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 (jinbinglin@caixin.com)

Read more about Caixin’s economic indexes.