Caixin
May 04, 2020 06:48 PM
ECONOMY

Caixin New Economy Index Edges Up on Rise in Tech Inputs

Workers produce solar photovoltaic cells at a workshop in East China's Jiangsu province, March 21. Photo: IC Photo
Workers produce solar photovoltaic cells at a workshop in East China's Jiangsu province, March 21. Photo: IC Photo

Biotech, advanced equipment manufacturing and other high value-added industries made more of a contribution to China’s total economic inputs last month thanks to expansions in technology and labor inputs, a Caixin index showed Saturday.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 32.1 in April, indicating that new economy industries accounted for 32.1% of China’s overall economic input activities. The reading was up from 31.2 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.

Of the three subindexes that make up the NEI, the one for technology inputs, which has a 25% weighting in the index, rose 2.8 points to 32 in April. The technology subindex measures the number of research personnel recruited by the tracked industries, the number of inventions they create and the number of patents they obtain.

The subindex for labor inputs, which has a weighting of 40%, edged up by 0.6 points from March to 26.1. The subindex for capital inputs, which has a 35% weighting, slipped 0.3 points from March to 38.9.

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 April, making up 11.8 percentage points of the NEI reading.

By tracking the daily flow of people in companies, office buildings and shopping malls, the NEI report has measured the extent to which businesses have gotten back to work as the Covid-19 outbreak wanes in China. In April, it found the flow of people in about two-thirds of listed companies was about 75% of where it was before the Lunar New Year holiday in late January. The same figure had recovered to 73% in office buildings and 67% in shopping malls.

The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, dropped 244 yuan ($34.60) from the previous month to 11,350 yuan.

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

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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