Free to Read: China’s New Economy Industries Gain as Capital, Labor Inputs Rise

The Caixin BBD New Economy Index came in at 33.8 in January, with the new information technology sector remaining the largest contributor

Of the 10 tracked industries, the new information technology industry remained the largest contributor to the index. Photo: AI generated

The contribution of high value-added industries such as biomedicine to China’s total economic inputs rose last month, due primarily to an increase in capital inputs, a Caixin index showed Sunday.

The Caixin BBD New Economy Index (NEI) came in at 33.8 in January, up 0.3 points from the previous month. That indicates that new economy industries accounted for 33.8% of China’s overall economic inputs.

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.

Capital inputs, which have a 35% weighting in the index, were recorded at 49 in January, up 2 points from the previous month.

Labor inputs, which account for 40% of the index, increased by 0.9 points to 19.4 in January. The subindex tracks employees’ incomes and the number of positions at new economy companies.

In contrast, the gauge for technology inputs read 35.5, down 3.1 points from December’s record high of 38.6. The subindex — the remaining 25% of the NEI — measures the number of research personnel recruited by the tracked industries, the number of inventions they created and the number of patents they obtained.

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 to the index, although its contribution decreased for a second consecutive month to 10.1 in January.

The average monthly entry-level salary in the 10 industries was 12,925 yuan ($1,803) in January, up 335 yuan from December, according to data compiled from online career and recruitment websites.

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.