Caixin New Economy Index Inches Up on Rising Capital Inputs

High value-added industries such as biotechnology and advanced equipment manufacturing contributed more to China’s overall economic inputs in January as capital inputs rose, a Caixin index showed Sunday.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 29.1 last month, indicating that new economy industries accounted for 29.1% of China’s overall economic input activities. The reading was up slightly from 29 in the previous month.

The NEI aims to track the size of, and changes in, China’s nascent industries by using big data. It measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.

The pickup in last month’s NEI was mainly due to an increase in the subindex for capital inputs, which has a 35% weighting. The subindex in January rose 0.9 points from the previous month to 33.9.

The technology input subindex, which has a 25% weighting, dropped 0.5 points from the previous month to 27.9. 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.

The subindex for labor inputs, which has a weighting of 40%, inched down from December.

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

Of the 10 tracked industries, new information technology remained the top contributor in January, making up 12.2 percentage points of the NEI reading. The biomedical industry was the second-largest contributor, while energy conservation and environmental protection ranked third.

The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, rose to 11,654 yuan ($1,660) in January from 11,311 yuan in the month before.

The monthly NEI reports are written by Caixin Insight Group and Chinese big-data research firm BBD, in collaboration with the National School of Development at Peking University.

Contact reporter Timmy Shen (hongmingshen@caixin.com, Twitter: @timmyhmshen) and editor Gavin Cross (gavincross@caixin.com)

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