Caixin
Jan 06, 2021 04:54 PM
ECONOMY

Caixin New Economy Index Dips on Decline in Capital Inputs

Workers make a wind turbine in Lianyungang, Jiangsu province.
Workers make a wind turbine in Lianyungang, Jiangsu province.

The contribution of high value-added industries such as advanced materials and new energy to China’s total economic inputs fell in December due primarily to a decline in capital inputs, a Caixin index showed.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 28.1 last month, indicating that new economy industries accounted for 28.1% of China’s overall economic input activities. The reading was down from 30.2 in the previous month.

The NEI, which was released Saturday, aims to make use of big data to track the size of China’s nascent industries. The index measures labor, capital and technology inputs in 10 emerging industries relative to those used by all industries.

The drop in last month’s NEI was mainly due to a decline in the subindex for capital inputs, which has a 35% weighting. The subindex fell 5.7 points from the previous month to 31.4 in December.

The technology input subindex, which has a 25% weighting, edged down 0.4 points from the previous month to 29.3. This gauge measures the number of research personnel recruited by the tracked industries, and the number of inventions they have created and patents they have obtained.

The subindex for labor inputs, which has a weighting of 40%, remained flat from the previous month at 24.4.

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 a strategic new industry encouraged by the government.

Of the 10 tracked industries, the new information technology industry remained the largest contributor in December, making up 8.5 percentage points of the NEI reading. The energy conservation and environment protection industry ranked second, contributing 7 percentage points.

The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, increased to 12,524 yuan ($1,945) in December, 93 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 reporter Tang Ziyi (ziyitang@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

Read more about Caixin’s economic indexes.

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