Guest Editors’ Words

• Author: Yiping Huang,Yan Shen
• DOI: http://doi.org/10.1111/cwe.12308
• Date: 01 January 2020
• Published date: 01 January 2020

©2020 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 1–3, Vol. 28, No. 1, 2020

1

Guest Editors’ Words

Yiping Huang, Yan Shen*

China has been at the forefront of nancial technology (ntech) growth, especially in

areas of digital nancial inclusion, such as providing mobile payment, online lending

and digital insurance to small and medium-sized enterprises (SMEs) and low-income

individuals. Each of the two main mobile payment service providers, WeChat Pay

and Alipay, has close to one billion users. During the rst 10 months of 2018, China

made a record US$12.8tn in mobile payment transactions, surpassing the US$49.3bn

transactions made in the US.1 And each of the three online banks, WeBank, MyBank

and XWBank, extends around 10 million SME and individual loans every year. In

2018, fintech investment in China reached US$25.5bn, accounting for 46 percent of

all ntech investment globally.2 While ntech is rapidly transforming business models,

individual lives and the macroeconomic environment in China, there is still inadequate

documentation of such revolutionary changes, let alone careful analytical research. This

special issue represents a small step in trying to ll this gap.

Six papers in this issue focus on a broad theme of interaction between ntech and

some macroeconomic variables, such as financial stability, monetary policy, interest

rate liberalization and consumption. Many of them apply micro level data in empirical

analyses and most studies have a clear focus on China.

“Do interest rate liberalization and fintech mix? Impact on shadow deposits in

China” by Stephanie Chan and Yang Ji studies the impact of interest rate liberalization

and fintech development on the stability of shadow deposits in China. Under the

setting that shadow banks provide higher but riskier returns compared with traditional

banks, they argue that the stability of shadow deposits is inuenced by two offsetting

effects: the patience effect that encourages investors to wait for higher returns, and

the uncertainty effect that induces investors to withdraw funds because of higher risk.

*Yiping Huang, Professor, Institute of Digital Finance, Peking University, China. Email: yhuang@nsd.pku.edu.cn;

Yan Shen, Professor, Institute of Digital Finance, Peking University, China. Email: yshen@nsd.pku.edu.cn.

1Data source: https://www.scmp.com/tech/apps-gaming/article/2134011/china-pulls-further-ahead-us-mobile-

payments-record-us128-trillion (online; cited December 2019).

2Data source: https://knowledge.wharton.upenn.edu/article/ntech-china-lies-ahead/(online; cited December

2019).