New Economy Index Continues to Rise As Technology Inputs Jump

The contribution of high value-added industries to China’s overall economic inputs continued to rise in April, as both technology and capital inputs in the industries increased, a private index showed Thursday.

The Mastercard Caixin BBD New Economy Index (NEI) rose to 28.6 in April from the previous month’s 28.3, indicating that new-economy industries accounted for 28.6% of China’s overall economic input activities — the highest reading in three months. The NEI dropped to a more-than-three-year low of 27.4 in February. 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 technology inputs recorded the biggest jump in April, growing 0.9 points from the previous month to 31.1. Technology inputs, which have a weighting of 25% in the index, measure the number of scientific research personnel recruited by the tracked industries, and the number of inventions they created and patents they obtained.

The subindex for capital inputs, which has a weighting of 35%, climbed 0.2 points to 28.7 in April. The subindex for labor inputs, with a weighting of 40%, fell 0.2 points to 26.8.

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 new sector supported by the government.

Among the 10 tracked industries, the new information technology industry remained the top contributor, making up 11 percentage points of the NEI’s reading, up 0.2 percentage points from March. Scientific research and high-tech services came in second, while biotechnology ranked third.

The average monthly entry-level salary in new-economy sectors, based on data compiled from online career and recruitment websites, was 10,672 yuan ($1,585) in April, 139 yuan higher than the month before.

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.