Caixin New Economy Index Keeps Creeping Up on Jump in Capital Inputs

The contribution of high value-added industries to China’s overall economic inputs continued to rise in February, as capital, labor and technology inputs in these industries increased, a Caixin index showed Monday.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 30.3 last month, indicating that new economy industries accounted for 30.3% of China’s overall economic input activities. The reading was up from 29.1 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 increase in last month’s NEI was mainly due to a rise in the subindex for capital inputs, which has a 35% weighting. The subindex last month rose 2.4 points from the previous month to 36.4.

The technology input subindex, which has a 25% weighting, rebounded 0.6 points from the previous month to 28.5. 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%, picked up 0.4 points from the previous month to 26.1 in February.

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 February, making up 11.6 percent points of the NEI reading. Advanced equipment manufacturing came in second. It was also the industry with the fastest growth in February, contributing 5.5 percentage points of the reading. The biomedical industry ranked third.

New economy industries also have been more resilient than traditional industries during the coronavirus outbreak, according to the report.

The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, was 12,224 yuan ($1,751.10) in February, 570 yuan higher than 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 Tang Ziyi (ziyitang@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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