Mastercard Caixin BBD China New Economy Index

Transcription

1 August 2018 Mastercard Caixin BBD China New Economy Index Released: 10:00 am Beijing Time September Overview In August 2018, the Mastercard Caixin BBD New Economy Index (NEI) reading came in at 29.1, indicating that the New Economy accounted for 29.1% of overall economic input activities that month, down 1.5 ppts from July (Chart 1). The declining NEI was due to the decrease of capital input. New economy is defined as following: 1) human capital intensive, technology intensive and capital light, 2) sustainable rapid growth, and 3) in line with the strategic new industries defined by the government. Please refer to our previous reports (March 2016 and March 2017) for the list of NEI sectors. Primary Inputs The NEI includes labor, capital and technology inputs that account for 40%, 35% and 25% of the total weights of the index, respectively. The decline in the August NEI reading came from the decrease of capital input (Chart 2). Capital investment fluctuated widely in the recent year, coming in at 31.9 this month, with 4.9 MoM decrease. Technology input index went down since March 2018, but rebounded to 28.1 this month, with 1.5 MoM increase. Labor input index declined moderately since July 2017, dropping to 27.3 this month, with 0.3 MoM decrease.

2 Taking the weight into account, percentage changes in labor, capital and technology inputs were -0.1, -1.7, and 0.4 ppts, respectively. The net NEI change was -1.5 ppts in total (Chart 3). As for sectors, the New IT industry formed the largest proportion of the New Economy Index, contributing 9.8 ppts to NEI. Advanced Materials was the industry with fastest growth in August, contributing 5.5 ppts and ranking the second. Biotech came fourth from second, the biggest drop in ranking, contributing 2.9 ppts in August (Chart 4).

3 New Economy Employment In August 2018, the average monthly entry level salary of the New Economy was RMB 10,320 per month, decreasing from last month s level of RMB 10,357 (Chart 5). New Economy wage information is compiled from online websites of career platforms and recruitment services including 51job and Zhaopin, as well as other sites that list job openings.

4 Hiring in the New Economy sectors accounted for 26.9% of the total in August, lower than the previous month s 27.1%. At the same time, the compensation share of New Economy sectors decreased to 27.7%, lower than the previous month s 28.1%. The average entry salary level of New Economy declined accordingly compared to the national level. The entry level salary premium of the New Economy was 3.1% as compared to economy-wide counterparts, decreasing from 3.6% in July (Chart 6). The average salary premium of the New Economy in August was the lowest ever since the index was published. Economic Trends Based on Employment Data As NEI declined, we explored how the new economy was depressed. As we mentioned previously, one reason is the state-owned enterprises crowded out its private counterparts in the past two years and China s macroeconomy faced downward pressure since the fourth quarter of The employment of general workers and operators dropped further this month, decreasing to about half level of December 2017, which was consistent with the declining industrial value-added growth rate in the past four months (Chart 7). However, it was worth noting that the profits of the industrial enterprises continued to rise. This dilemma came from the price increase caused by supply side reform, from which the large-size companies benefited in market power and profits at cost of the small and medium-sized ones.

5 We evaluated city s economic activity in terms of new jobs. A new job was defined as a job position not posted in the past 90 days. The overall share of new jobs among total hiring showed a downtrend since the second half of 2017, decreasing to 38% this month from 57% in June 2017 (Chart 8). It diverged city-wise though. The share of new jobs in Shanghai, Guangzhou and Chengdu declined slightly, while that of Shenzhen and Beijing dropped rapidly, indicating the loss of economic activity.

6 The Impact of Trade War Based on Different Enterprise Employment We focused on the ongoing U.S.-China trade war. Using detailed exporting data of 2016 and lists of American tariffs on Chinese products in 2018, we categorized all manufacturing enterprises exporting products to U.S. into six groups by the percentage of products exported to United States (0-50%,50%-100%) and the average tariff rates (0-10%,10%-20%, above 20%) as below (Chart 9-1). Chart 9-2 showed employment changes of the above enterprises. All enterprises experienced a rapid growth in employment in February 2018, but employment share of the high-export & high-tariff group dropped sharply since May The high-export & low-tariff was losing employees since July as well. The trade war was making negative effect on employment.

7 City Rankings of the New Economy Based on overall New Economy rankings, the top twenty cities were shown in Chart 10. The top five cities were Beijing, Shanghai, Shenzhen, Guangzhou and Nanjing. Rankings are based on a weighted average of the percentile rank of indicators for the city in the past 6 months.

8 Chart 11 showed the average NEI city rankings between February 2018 and August The top five cities were Beijing, Guangzhou, Shanghai, Shenzhen and Nanjing.

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10 For further information please contact: Mastercard Mr. Wu Huanyu, Director, Communications Tel: Caixin Insight Group Dr. Wang Zhe, Senior Economist Tel: Ma Ling, Public Relations Tel: BBD Dr. Chen Qin, Chief Economist Tel: The Mastercard Caixin BBD China New Economy Index is the fruit of a research partnership between Caixin Insight Group and BBD, in collaboration with the National Development School, Peking University. The subject of a year of research, the NEI was first publically released on March 2, 2016 and will be issued the 2nd of every month at 10:00am China Standard Time. About Caixin Caixin Media is China's leading media group dedicated to providing financial and business news through periodicals, online content, mobile applications, conferences, books and TV/video programs. Caixin Media aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms. Caixin Insight Group is a high-end financial data and analysis platform. For more information, please visitwww.caixin.com. About Mastercard Mastercard (NYSE: MA), is a technology company in the global payments industry. We operate the world s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard s products and solutions make everyday commerce activities such as shopping, traveling, running a business and managing finances easier, more secure and more efficient for everyone. Follow us on join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.

11 About BBD (Business Big Data) BBD is a leading Big Data and quantitative business analytics firm specializing in the analysis of the high-growth industries emerging in Mainland China. Through dynamic data tracking, credit analysis, risk pricing and economic index construction, BBD provides its clients with a wide range of services at both the macro and micro level. For more information, please visit