Rise in China’s Labor Investment Pushes Up Caixin New Economy Index
The contribution of high value-added industries such as new-energy vehicles to China’s total economic inputs rebounded in October due chiefly to a rise in labor investment, a Caixin index showed Tuesday.
The Mastercard Caixin BBD New Economy Index (NEI) came in at 28.9 last month, indicating that new economy industries accounted for 28.9% of China’s overall economic input activities. The reading was up from 28.2 in September, which had marked the second straight month of decline.
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.
Growth in the index was mainly caused by a rise in the subindex for labor inputs. The subindex, which has a 40% weighting, increased 1.5 points month-on-month to 22.3 in October. The subindex measures employee income and positions in new economy industries.
The technology input subindex, which has a 25% weighting, increased slightly by 0.3 points month-on-month to 27.7 in October. It gauges the number of research personnel recruited by the tracked industries, the number of inventions they have created and the number of patents they have obtained.
The subindex for capital inputs, which has a weighting of 35%, stayed unchanged from the previous month at 37.3.
“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,” according to a Caixin report on the index.
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 October, making up 9.8 percentage points of the NEI reading, down from 11.3 percentage points the previous month. The contribution of the advanced equipment manufacturing industry ranked second, contributing 6.4 percentage points.
The average monthly entry-level salary in the 10 industries, based on data compiled from online career and recruitment websites, was 13,100 yuan ($2,047.50) in October, 195 yuan higher 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 (email@example.com) and editor Bertrand Teo (firstname.lastname@example.org)
Read more about Caixin’s economic indexes.
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