(Bloomberg) -- As China shifts away from the old smokestack industries that powered its economic rise, the new pillars of consumers and services are more important than ever.
They’re also trickier to measure than the straightforward old drivers like railroad volumes or steel production, but data miners are decoding them with new tools.
One solution is the New Economy Index, which is compiled from online sources such as air traffic, employment ads and venture capital investments to give better and earlier reads on some of the more vibrant parts of the world’s second-largest economy. Premier Li Keqiang, whose musings on proxies for growth live on as an index of their own, called the new gauge "entrepreneurial" during an April visit to Peking University.
It’s one of many alternative indicators tracking brokers, law firms, software companies, pharmaceutical labs and new energy car plants that are filling out the picture of activity beyond the older and more established official statistics from the government.
The team behind the gauge is Chengdu-based data miner Business Big Data, Peking University, and Shanghai-based investment adviser CEBM Group Ltd., a unit of business magazine publisher Caixin Media Co.
BBD Chief Economist Chen Qin explains his ambition by way of a Song Dynasty poem: "The duck knows first when the river becomes warm in spring," he said. "We catch the ducks and see where the entire economy is going."
Chen’s New Economy Index, which expresses the amount of that activity as a ratio compared with the broader economy, decreased to 29.2 in October from 30.1 in the previous month.
Chen said China’s economy is transitioning toward companies with highly skilled employees and big investments in technology. Those are among the criteria he uses to select 111 industries that are more sensitive to changes in momentum, from equipment manufacturing to financial and legal services, to express how the new drivers are doing.
Chen’s work has attracted attention beyond the premier. He racked up more than 100,000 followers at Q&A site Zhihu.com by answering questions about economics and demographics during his days as lecturer at Fudan University in Shanghai. Fans on the site have dubbed him Shuju Di, the "Data King."
Chen’s transition from academia to big data guru followed a bout of boredom during an especially tedious paper review and editing process. A friend he knew from Zhihu mentioned the opportunity at BBD, he started part time last year, and soon was working full time. Now he’s leading a team of analysts he recently hired into uncharted territory.
"There are still too many leading indicators to be mined from the web," Chen said, citing the number of new marketing and sales job listings that express corporate confidence in expansion as well as how he sees airline and rail travel as leading indicators for big city property prices. "More and more businesses are showing their behavior online."