Shrinking Capital Investment Drives Down Caixin New Economy Index
The contribution of high value-added industries such as new information technology to China’s total economic inputs fell in June due chiefly to a decline in capital investment, a Caixin index showed.
The Mastercard Caixin BBD New Economy Index (NEI) came in at 28.6 last month, indicating that new economy industries accounted for 28.6% of China’s overall economic input activities. The reading was down from 31 in the previous month.
The NEI, which was released Friday, aims to track the size of China’s nascent industries, using big data. It 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 caused by a decline in the subindex for capital inputs. The subindex, which has a 35% weighting, fell 6.7 points month-on-month to 34 in June.
The technology input subindex, which has a 25% weighting, increased by 0.7 points month-on-month to 30.1 in June. 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%, edged down 0.6 points from the previous month to 23 in June.
Launched in March 2016, the NEI 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, the new information technology industry remained the largest contributor in June, making up 8 percentage points of the NEI reading.
The average monthly entry-level salary in the 10 industries, based on data compiled from online career and recruitment websites, reached a record high at 12,954 yuan ($2,004) in June, 289 yuan higher than the previous month.
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 Lin Jinbing (email@example.com)
Read more about Caixin’s economic indexes.
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