Decline in Tech Inputs Drags Down New Economy Index
High value-added industries contributed less to China’s economy in May as technology inputs in those industries declined, a Caixin index showed Sunday.
The Mastercard Caixin BBD New Economy Index (NEI) dipped to 28 in May from 28.6 in the previous month, indicating that new economy industries accounted for 28% of China’s overall economic input activities. The index measures labor, capital and technology inputs in 10 emerging industries relative to those of the whole economy.
The NEI consists of three subindexes — for technology, labor and capital. The technology input subindex fell to 28.3 in May from the previous month’s 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 to 29.1 last month from April’s 28.7. The subindex for labor inputs, with a weighting of 40%, remained unchanged at 26.8.
Launched in April 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 8.3 percentage points of the NEI’s reading.
The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, was 10,776 yuan ($1,559) in May, 104 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 (firstname.lastname@example.org)
Read more about Caixin’s economic indexes.
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