@inproceedings{lei_digital_2023, address = {Singapore}, title = {Digital {Renminbi}: {Impacts} on {Economic} {Integration} of the {Greater} {Bay} {Area}}, isbn = {978-981-9919-79-6}, shorttitle = {Digital {Renminbi}}, doi = {10.1007/978-981-99-1979-6_1}, abstract = {The degree of economic integration in the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), as reflected in the mobility of trade and capital flows, has been strengthened by free trade agreements, but obstacles including border effects, capital controls, differences of exchange rate systems and inadequate cross-regional coordination remain. Digital renminbi (e-CNY) has been tested in Shenzhen, a core GBA city since April 2020. If e-CNY is adopted in the GBA, the area will effectively become a single currency zone. Whether the GBA constitutes an “optimum currency area” (OCA) depends on its degree of economic integration. This paper computes real interest rate differential (RID), uncovered interest rate differential (UID) and deviation from purchasing power parity (PPD) of each regional pair based on data of interest rates, exchange rates and price indexes from 2016M2 to 2022M7. All UID, PPD and RID series have means within about 1 percent point from 0, indicating high degrees of financial integration, real integration and economic integration. With the exception of Guangdong-Macau RID, all series are stationary, implying mean-reverting behavior. Hence, the parities are expected to hold both in the short run and in the long run, which is a condition for an OCA in the GBA. Furthermore, the regression analysis finds that the test launch of e-CNY in Shenzhen (adjusted for the COVID-19 outbreak) has significant impacts on all RIDs, Guangdong-Macau PPD and Hong Kong-Macau PPD. With merely two and a half years of test launch, the introduction of e-CNY already had impacts on overall economic integration in the GBA.}, language = {en}, booktitle = {Economics and {Finance} {Readings}}, publisher = {Springer Nature}, author = {Lei, Weng Chi and Wang, Xinru}, editor = {Lau, Evan and Brahmana, Rayenda Khresna and Tan, Lee Ming}, year = {2023}, keywords = {Economic development policy, Economic integration, Exchange rate regime, Financial integration, Greater Bay Area, Optimum currency area}, pages = {1--14}, } @incollection{lau_road_2020, title = {The {Road} to {Service} {Export} {Diversification}: {Gambling} and {Convention} in {Macao}}, isbn = {9789811529054}, url = {https://www.springer.com/gp/book/9789811529054}, abstract = {This book is a compilation of the best papers presented at the APEF 2019 conference which was held on 25th and 26th July 2019 at the Grand Copthorne Waterfront in Singapore. With a great number of submissions, it presents the latest research findings in economics and finance and discusses relevant issues in today's world. The book is a useful resource for readers who want access to economics, finance and business research focusing on the Asia-Pacific region.}, language = {en}, urldate = {2021-02-04}, booktitle = {Economics and {Finance} {Readings}: {Selected} {Papers} from {Asia}-{Pacific} {Conference} on {Economics} \& {Finance}, 2019}, publisher = {Springer Singapore}, author = {Lei, Weng Chi}, editor = {Lau, Evan and Simonetti, Biagio and Trinugroho, Irwan and Tan, Lee Ming}, year = {2020}, doi = {10.1007/978-981-15-2906-1}, }