China’s State Council or Cabinet’s decision to permit the use of Ren-Min-Bi (RMB) , in cross-border trade settlement, as part of its long-term plan to globalize its currency and reduce the domination of the US dollar, will eventually reshape forces at play in international foreign exchange (forex) markets.
Presently, the currency of China — the world’s third largest economy and trading nation — is not exerting befitting influence in the forex markets due mainly to limited use of the Yuan in international trade and investments, as well as restrictions placed on its supply and convertibility.
However, the window to Yuan’s liberation was opened wider when Beijing launched the pilot scheme on RMB cross border trade settlement on July 6.
It was more than a decade since the Malaysian Palm Oil Board (MPOB) took over the task of nurturing the national palm oil industry. Since then, many battles against those who question the value of palm oil on health grounds have been won.
But fresh fires are being lit by palm oil detractors, who have shifted their focus onto the environment battlefront. Now these efforts play on the populist sentiments surrounding ozone depletion, global warming and the resultant climate change.
The very existence of palm oil plantations is being questioned for its alleged contribution to species and biodiversity loss, with the carving out of plantations purportedly impacting the future of wildlife in their jungle habitats.
This undue attention has moved to the orang utan, whose love-able features, apparent childlike innocence and helpless vulnerability have turned the primate into a valuable mascot with which to attack palm oil.
Appetite to create global reserve bank to issue the currency and monitor national exchange rate is brewing. In early 2009, the BR IC’s proposed replacing the US$ as the main reserve currency following the financial crisis due to the collapse of US mortgage market that led to the worst global recession since World War II.
Also, the economic power is shifting from G7 countries that saw increasing acceptance of the other economies currencies. And if US recovery is weak, rates will remain low, thus pressuring the US$ to stay weak.
Good and Service Tax (GST) which was first announced by the Government of Malaysia in 2004 to be implemented in Malaysia on Jan 1, 2007, is now in the final stage of implementation study by the Government.
The GST addresses the need for the Government to ensure increased revenue flows in the coming years by expanding the tax base. Upon implementation of the GST, the existing Service Tax and Sales Tax in Malaysia will be abolished.
The GST will operate similarly to that in other countries with a GST or VAT (Value Added Tax) system. There will be two rates — a zero-rate which will apply to most goods and services exported from Malaysia, and a standard rate, yet to be announced, but expected to be less than 5%. In comparison, the GST rates of the closest neighboring countries are 7% in Singapore and Thailand and 10% in Indonesia.