The contribution of high value-added industries such as new energy and biotechnology to China’s total economic inputs shrank in March, due to a decline in capital inputs, a Caixin index showed Sunday.
The Caixin BBD New Economy Index (NEI) came in at 28.3 last month, indicating that monitored new economy industries accounted for 28.3% of China’s overall economic input activities. The gauge dipped 1.2 points from 29.5 in February, to match January’s reading.
The NEI uses big data to track the size of China’s new economy sectors. It measures labor, capital and technology inputs in 10 emerging industries — including new energy, new-energy vehicles, and advanced equipment manufacturing — relative to those in all industries.
The downturn last month was dragged by a drop in the subindex for capital inputs. With a 35% weighting, the subindex plunged by 4.6 points from February to 36.1, as both venture capital levels and the capitalization levels of companies in new economy industries applying to join the National Equities Exchange and Quotations Co. Ltd. (NEEQ) (新三板) both dropped.
The NEEQ is an over-the-counter marketplace for small firms that do not meet the listing standards for China’s major stock exchanges.
Meanwhile, the labor input subindex, which has a 40% weighting and measures employee income and the number of positions in the relevant industries, rose 0.5 points month-on-month to 22.6 in March.
The technology input subindex, which gauges the number of research personnel recruited by the tracked industries, as well as the number of inventions created and patents obtained, ticked up by 0.9 points to 26.4 last month. It makes up the remaining 25% of the NEI.
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 deemed strategically important by the government.
Of the 10 tracked industries, the new information technology sector remained the largest contributor in March, accounting for 9.6 points of the reading. Biotechnology ranked second, contributing 5.4 points and gaining 1.2 points month-on-month, due chiefly to rising venture capital levels in the sector.
The average monthly entry-level salary across the 10 industries was 13,730 yuan ($1,993) in March, up 150 yuan from the previous month, 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.
Contact reporter Zhang Ziyu (ziyuzhang@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
Read more about Caixin’s economic indexes.
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