Oct 07, 2021 05:27 PM

China’s Shrinking Labor Investment Drives Down Caixin New Economy Index

A new-energy vehicle gets charged up Wednesday in Shaoxing, East China’s Zhejiang province. Photo: VCG
A new-energy vehicle gets charged up Wednesday in Shaoxing, East China’s Zhejiang province. Photo: VCG

The contribution of high value-added industries such as new information technology to China’s total economic inputs fell in September due chiefly to a decline in labor investment, a Caixin index showed Saturday.

The Mastercard Caixin BBD New Economy Index (NEI) came in at 28.2 last month, indicating that new economy industries accounted for 28.2% of China’s overall economic input activities. The reading was down from 28.5 in August.

The NEI uses big data to track the size of China’s nascent industries. It measures labor, capital and technology inputs in 10 emerging industries relative to those used in all industries.

The drop in the index was mainly caused by a decline in the subindex for labor inputs. The subindex, which has a 40% weighting, fell 3.4 points month-on-month to 20.8. The subindex measures the ratios of employee income and positions in new economy industries.

The technology input subindex, which has a 25% weighting, dropped slightly by 0.1 points month-on-month to 27.4 in September. It gauges the number of research personnel recruited by the tracked industries, the number of inventions they have created and the patents they have obtained.

The subindex for capital inputs, which has a weighting of 35%, edged up 3 points from the previous month to 37.3 in September.

“After the outbreak of Covid-19 in early 2020, the NEI kept going up for several consecutive months. However, with the post-pandemic economic recovery triggered in the second quarter last year, the old economy showed stronger growth, suppressing the new economy,” the report said.

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 strategically encouraged by the government.

Of the 10 tracked industries, the new information technology industry remained the largest contributor in September, making up 11.3 percentage points of the NEI reading, higher than the previous month.

The average monthly entry-level salary in the 10 industries, based on data compiled from online career and recruitment websites, was 12,905 yuan ($2,002) in September, 28 yuan lower than the previous month.

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 Guo Yingzhe ( and editor Lin Jinbing (

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