Caixin
Nov 05, 2020 04:50 PM
ECONOMY

Caixin New Economy Index Rebounds on Rising Capital Inputs

The contribution of high value-added industries, such as new information technology, to China’s total economic inputs grew in October following three straight months of decline, largely boosted by an increase in capital inputs from the previous month, a Caixin index showed.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 29.5 last month, indicating that new economy industries accounted for 29.5% of China’s overall economic input activities. The reading was up from 28.9 in the previous month.

The NEI, which was released Monday, 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 rebound in last month’s NEI was mainly due to growth in the subindex for capital inputs. The subindex, which has a 35% weighting, rose 1.7 points month-on-month to 36.9 in October.

The technology input subindex, which has a 25% weighting, increased by 1.1 points from the previous month to 28.2, marking the first monthly growth since April.

This gauge measures the number of research personnel recruited by a group of tracked industries, as well as the number of inventions they have created and patents they have obtained.

The subindex for labor inputs, which has a weighting of 40%, edged down 0.5 points from the previous month to 23.9 in October.

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 a strategic new industry encouraged by the government.

Of the 10 tracked industries, the new information technology industry remained the largest contributor in October, making up 8.3 percentage points of the NEI reading. The advanced equipment manufacturing industry ranked second, contributing 5.6 percentage points.

The average monthly entry-level salary in the 10 industries, based on data compiled from online career and recruitment websites, surged to 11,874 yuan ($1,776) in October, 452 yuan higher than the month before.

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 editor Michael Bellart (michaelbellart@caixin.com)

Read more about Caixin’s economic indexes.

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