Caixin New Economy Index Records Third Straight Monthly Drop
The contribution of high value-added industries such as advanced equipment manufacturing to China’s total economic inputs declined in September for a third straight month in a further sign that the economy’s recovery from the pandemic is slowing, a Caixin index showed.
The Mastercard Caixin BBD New Economy Index (NEI) came in at 28.9, down from 30.4 in August. The new reading indicates that new economy industries accounted for 28.9% of China’s overall economic input activities last month.
The third consecutive monthly drop since the index hit a two-year high in June of 32.1 indicates that even the fastest-growing part of China’s economy is struggling amid a broad slowdown. The September decline reflected decreases in investment, employment and innovation, and entry-level salaries fell.
The NEI, launched in March 2016, defines new economy industries as those that are human capital- and technology-intensive but asset-light, experience sustainable and rapid growth, and are among the strategic new industries encouraged by the government. The NEI aims to track the size of China’s nascent industries and changes in them by using big data. It measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.
The drop in September was mainly driven by a decline in capital inputs. The capital input subindex, which has a 35% weighting, declined to 35.2 in September from 38.5 in August. The subindex for labor inputs, which has a weighting of 40%, fell to 24.4, down from 25.2 the previous month.
The technology input subindex, which has a 25% weighting, fell to 27.1 from 27.5 the previous month. This gauge measures the number of research personnel recruited by the tracked industries and the number of inventions created and patents obtained.
Of the 10 tracked industries, the new information technology industry was the largest contributor in August, making up 9.9 percentage points of the NEI reading.
The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, dropped to 11,423 yuan ($1,682) in September, 65 yuan lower than the month before. But new economy entry-level salaries were still 7.7% higher than the national average level.
The monthly NEI reports are written by Caixin Data Technology Co. Ltd. and Chinese big-data research firm BBD, in collaboration with the National School of Development at Peking University.
Contact reporter Denise Jia (firstname.lastname@example.org) and editor Bob Simison (email@example.com)
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