New Economy Index Rebounds Slightly After Capital Influx

The contribution of high-value-added industries to China’s overall economic inputs rebounded in March from a more than three-year low the month before, due to an increase of capital inputs in new economy industries, according to a private index released on Tuesday.

The Mastercard Caixin BBD New Economy Index (NEI) rose to 28.3, indicating that new economy industries accounted for 28.3% of overall economic input. The reading was just off February’s 27.4, the lowest of available data dating back to October 2015, when the index launched. The NEI measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.

The rise in last month’s index reading was driven chiefly by the increase in the subindex for capital inputs, which rebounded to 28.5 from February’s 26.1. Among the three subindexes that make up the NEI, capital inputs have a weighting of 35%.

The subindex for labor inputs, which has a weighting of 40%, edged up to 27 in March from 26.7 in the month before. The technology input subindex stood at 30.2, down slightly from 30.4 the previous month.

Launched three years ago, 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 new sector supported by the government.

The new information technology industry made the largest contribution to the NEI in March, making up 10.8 percentage points of the index’s reading. The energy conservation and environment protection industry was the second largest contributor, making up 4.5 percentage points of the reading.

The average monthly entry-level salary in new economy sectors, based on data compiled from online career and recruitment websites, was 10,533 yuan ($1,567) in March, down from the previous month’s 10,627 yuan.

The monthly NEI reports are compiled by Caixin Insight Group — a financial data and analysis platform which is an affiliate of Caixin Global — and Chinese big-data research firm BBD, in collaboration with the National School of Development at Peking University.

A previous version of this story incorrectly stated how long it had been since the index had fallen below February’s reading of 27.4. That reading was the lowest since October 2015.

Contact reporter Liu Jiefei (jiefeiliu@caixin.com)

Read more about Caixin’s economic indexes.