Caixin New Economy Index Drops in September as Capital Inputs Weaken

The contribution of high value-added industries to China’s economy dipped in September amid decreasing capital, technology and labor inputs, a Caixin Index showed Wednesday.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 28.7 in September, indicating that new economy industries accounted for 28.7% of China’s overall economic input activities. The reading was down from 29.4 in the previous month. The NEI 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, which has a weighting of 35% in the index, logged the biggest decrease, falling 1.3 points from the previous month in September to 33.1.

The subindex for technology inputs, which has a weighting of 25%, fell 0.8 points to 26.3 in September. This subindex measures the number of research personnel recruited by the tracked industries, and the number of inventions they created and patents they obtained.

The subindex for labor inputs, with a weighting of 40%, edged down to 26.4 in September from 26.5 in the month before.

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

Of the 10 tracked industries, the new information technology industry continued to be the largest contributor in September, making up 8.1 percentage points of the NEI reading. The culture, sport and entertainment sector was the fastest-growing industry last month, making up 3.3 percentage points of the reading.

The average monthly entry-level salary in new-economy industries, based on data compiled from online career and recruitment websites, rose slightly to 11,054 yuan ($1,547) in September from 10,960 yuan in the month before.

The monthly NEI reports are written 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.