Mastercard Caixin BBD China New Economy Index

Transcription

1 October 2018 Mastercard Caixin BBD China New Economy Index Released: 10:00 am Beijing Time November Overview In October 2018, the Mastercard Caixin BBD New Economy Index (NEI) reading came in at 29.8, indicating that the New Economy accounted for 29.8% of overall economic input activities that month, down 1.5 ppts from September (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 October NEI reading came from the decrease of capital input (Chart 2). Capital input fluctuated widely in the recent year, dropping to 34.6 this month, with 4.5 MoM decrease. Technology input index went down since March 2018, coming in at 27.4 this month, with 0.7 MoM increase. Labor input index showed a stable trend in the past two months, decreasing slightly to 27.1 this month, with 0.3 MoM decrease.

2 Taking the weights into account, percentage changes in labor, capital and technology inputs were -0.1, -1.6, and 0.2 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 10.8 ppts to NEI. Advanced Equipment Manufacturing was the industry with fastest growth in October, contributing 3.7 ppts and ranking the third. Advanced Materials came eighth from third, the biggest drop in ranking, contributing 0.5 ppts in October (Chart 4).

3 New Economy Employment In October 2018, the average monthly entry-level salary of the New Economy was RMB 10,150, decreasing from last month s level of RMB 10,161 (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 26.7% of the total in October, lower than the previous month s 26.9%. At the same time, the compensation share of New Economy decreased 0.26%. Accordingly, the average entry salary level of New Economy declined compared to the national level. The entry-level salary premium of the New Economy decreased, from 3.8% in September to 3.2% as compared to economy-wide counterparts (Chart 6). Economic Trends Based on Employment Data We focused on China s economy this month. In 2018Q3, China s real GDP growth rate fell to 6.5%. It was among the quarters with lowest growth since 1992 (1999Q4 and 2009Q1), which indicated a business cycle typically lasting for quarters. We are in the trough and the macroeconomy won t be worse in our opinion. Chart 7 showed the employment of general workers and operators continued to decline and the share of new jobs started to rebound in October. However, not all industries new jobs saw a rise. Job creations in Electronic Technology, Petroleum and Hotel sectors were climbing, while the new jobs of IT, New Media and Fund industries were still in decline. We are experiencing an economic transformation cycle and the upstream sectors such as energy and basic research start to recover.

5 Operation of Different Enterprises Based on Employment Data In 2018Q3, the divergence between state-owned and private enterprises weakened. According to the National Bureau of Statistics, the growth rate of state-owned enterprises profits fell sharply YoY, but their private counterparts were stabilizing marginally. The new employment of state-owned enterprises showed a growth trend since July 2017, but started to drop after reaching the peak in March 2018 (Chart 8). Meanwhile, the job creation by private enterprises began to rebound. So did the new employment of large and small companies. Resource allocation among enterprises in difference ownerships shows a cyclical pattern and it s currently regressing to the mean.

6 Chart 9 showed the share of new enterprises in specific areas in October 2016, October 2017, and October The share of new enterprises in 2017 top-ranked Engineering and Decoration declined in this month, while that in IT and culture went down and up. Besides, sub-sector of Automobile was ranking down in two consecutive years and Environmental Protection sector was experiencing two years of expanding. China s Economy is stabilizing in the bottom in terms of structure adjustment.

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 six months. Chart 11 showed the average NEI city rankings between April 2018 and October The top five cities were Beijing, Nanjing, Guangzhou, Shanghai and Shenzhen.

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9 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.

10 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