(Yicai Global) June 5 -- Traditional economic analysis can hardly keep up with a rapidly changing world, and the novel coronavirus pandemic has brought its limitations into even sharper relief.

Yicai Research Institute and Yicai Global have developed a new gauge -- the Yicai High Frequency Economic Activity Index -- which uses timely and high-frequency data and designs new economic indicators based on a science-based analytical framework to understand trends in a timely and effective manner.

The YHEI index will be released every week from this month. Its start date is Jan. 1, 2019, with the benchmark value of 1 set as the previous year’s average. The benchmark value last year is this year’s average value. A reading of more or less than 1 means that current economic activity is stronger or weaker than the average of the previous year.

“Providing indicators that can reflect changes in economic activities in a rapidly changing world is crucial for policy makers, researchers and investors. As a public product provided by Yicai Media Group to the market, the launch of YHEI index also shows Yicai Research Institute's commitment to improving public policy,” said Yang Yanqing, deputy editor-in-chief of Yicai Media and managing director of Yicai Research Institute today.

The reading was 0.89 on June 2. Though recovering rapidly, economic activity has not yet returned to normal. It fell to 0.37 on Feb. 14, when activity across the country was broadly stagnant due to the impact of the Covid-19 outbreak, even though the Chinese New Year holiday had ended. Activity has begun to recover quickly since then.

Judging by the sub-indexes, the real estate market and manufacturing have basically recovered, while the rebound in consumption and trade is lagging.

The restoration of power generation shows that production is basically back to normal, and the direct impact of the epidemic on the social and economic order has rapidly weakened.

The key issues now include addressing the negative impact of the previous months of economic stagnation, boosting consumer confidence in health and economic conditions, and dealing with the impact of a general contraction in external demand on manufacturing.

Sub-Indexes

The 30 City Traffic Congestion Index continued to fluctuate above the benchmark after the May Day holiday, and reached 1.04 on June 2. In contrast, the Eight City Metro Flow Index picked up slowly to 0.78. The difference between the two shows that fears about the epidemic have not been completely dispelled, with some people still avoiding public transport.

The Power Generation’s Coal Consumption Index fluctuated around the benchmark and remained at the same level as the same period last year. The pick-up in coal use means that thermal power plants have resumed normal operations. Electricity consumption is closely related to economic activities such as manufacturing.

The Air Pollution Index was close to the level of the same period last year.

The 30 City Commercial Housing Sales Index reached 1.15, exceeding last year’s average, indicating a clear rebound in the real estate market. The largest market for domestic demand, which stagnated completely in February, has also recovered quickly.

The Unemployment Index, a gauge of Baidu searches for the keyword ‘unemployment,’ reached 2.87 in mid-April and fell back to 1.68 on June 2. That reflects people’s expectations of job stability, which will affect consumption.

The Bankruptcy Index, a gauge of Baidu searches for the keyword ‘bankruptcy,’ is related to the confidence of private small- and mid-sized businesses. The index rose to 1.56 at the end of April, indicating a severe setback. On June 2, it fell to 1.09, a significant drop, but still above the benchmark level.

Editor: Peter Thomas