Officials of Baidu indicate that Baidu’s economic index has no direct competitors now, which makes it a solid supplement for the economic well-being index announced by the National Bureau of Statistics in China.
Baidu officially promoted the new product, the Baidu Economic Index, on August 12th. The Baidu Economic Index is based on big data and is used to predict economic indexes.
According to Baidu, the new product mainly contains two functions: SME economic well-being index and predictions for macroeconomic index. Specifically, the former is able to dynamically reflect the development and running status of SME in different areas and different industries. The latter is used to make a 3-month prediction for macroeconomic indexes, e.g. leading indicators, consistency index, PPI, and PMI. All of these can be used to indicate the level of economic development in China.
Moreover, the critical point for the SME economic well-being index is 100. If the well-being interval is over 100, this means the economy tends to be improving. The higher the index the better the economic condition. If the value is under 100, then the economy tends to be deteriorating. The lower the index is the more the economy will suffer.
As it mentioned by officials of Baidu, the Baidu Economic Index has no direct competitors now, which makes it a solid supplement for the economic well-being index announced by the National Bureau of Statistics in China. Regarding the theory of the Baidu Economic Index, relevant officials in charge explained in an interview with Securities Daily that calculation data for Baidu’s economic index comes from Baidu search data, 95% of which is generated by Chinese people.
The large quantity of data includes demand info for multiple enterprises and behavior info for a variety of consumers. All of these can show trends and regular patterns of enterprises and consumers in their practical production and daily life.
What is also added by officials of Baidu is that the SME economic well-being index is based on principles and methods of the Stock-Watson well-being index. In the process of weaving SME economic well-being index, trends and seasonal effects were eliminated. Also the prediction of the macroeconomic index used part of the data from SME economic well-being index, fitting the prediction with the time series model.
It’s worth mentioning that, enterprise well-being statistics generally for large-scale enterprises, and statistical indexes for measuring the operating status of SME are in demand. Therefore, the promotion of Baidu’s economic index will hopefully fill this gap.
What’s more, analysts say it’s another applied innovation for Baidu big data, since Baidu promotes products aimed at economic analysis and prediction. For policy-making governments, Baidu’s economic index may help to constantly monitor running features and developing trends of SME for various economic sectors. Also it offers a useful reference for drafting and adjusting monetary policy, fiscal policy and relevant products policy.
For enterprises, especially SME, Baidu’s economic index will benefit employees in understanding the development status of multiple industries, which could help to establish targeted development and transformation strategies. Plus, Baidu’s economic index is helpful for economists and analysts, as it’s possible for them to follow hot development issues in various industries and dig into more valuable investment opportunities.