Drop in Capital Investment Drags on Caixin New Economy Index
The contribution of high value-added industries such as advanced materials and new energy to China’s total economic inputs fell in April due primarily to a decline in capital investment, a Caixin index showed.
The Mastercard Caixin BBD New Economy Index (NEI) came in at 27 last month, indicating that new economy industries accounted for 27% of China’s overall economic input activities. The reading was down from 29.1 in the previous month.
The NEI, which was released Sunday, uses 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 5.3 points from March to 29.5.
The technology input subindex, which has a 25% weighting, dropped 0.2 points month-on-month to 28.5 in April. 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%, decreased by 0.5 points from the previous month to 23.8.
The NEI, launched in March 2016, defines a new economy industry as one that is technology- and human capital-intensive but asset-light, experiences sustainable and rapid growth, and is a strategic new industry encouraged by the government.
Of the 10 tracked industries, new information technology was the largest contributor in April, making up 5.2 percentage points of the NEI reading. The energy efficiency and environmental protection industry ranked second, contributing 4.5 percentage points.
The average monthly entry-level salary in new economy industries, based on data compiled from online career and recruitment websites, rose to 12,555 yuan ($1,936.7) in April, 422 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 (firstname.lastname@example.org) and editor Lin Jinbing (email@example.com)
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