As The Straits Times reports, Singapore and China will launch direct trading between the Singapore dollar and the Chinese renminbi from Tuesday, in a move set to lower currency conversion costs and boost their already strong trading links.
"The Chinese want to look at partners that have a well regulated market and a good reputation as they internationalise the yuan. They look at Singapore and find us a useful partner to have," said Mr Teo at the sidelines of the Joint Council for Bilateral Cooperation (JCBC) - the highest-level bilateral negotiation mechanism.
Mr Zhang also announced that Singapore has been chosen as one of the investment destinations under the RMB Qualified Domestic Institutional Investor (RQDII) scheme, which will give Chinese institutional investors access to Singapore's capital markets.
China is Singapore's largest trading partner. Singapore was also the largest foreign investor in the world's No. 2 economy last year.
As part of efforts to internationalise the renminbi, China has launched direct trading with several currencies: the euro, the British pound, the Japanese yen and the New Zealand dollar.
Tax competition exists when politicians feel pressure to lower tax rates because they’re concerned that jobs and investment capital may cross borders,—a process that has become much easier in recent decades because of globalization.
In other words, tax competition exists when governments compete with each other. The economic analysis of this process is very straightforward. Monopolies are bad, competition is good.
Consumers benefit when banks compete for their business. They benefit when grocery stores compete for their business, and they benefit when pet stores compete for their business. Likewise, taxpayers benefit when governments compete.
Let’s use an analogy. Imagine a town with just one gas station. That one gas station could charge high prices, maintain inconvenient hours, and offer shoddy service. But what if there are five stations in that town? Consumers then are free to choose, and this means gas stations will compete to offer the best product at the best price with the best service.
The same process exists with governments.
In the absence of any constraints, politicians will continuously raise tax rates because it’s in their self-interest to have bigger, more intrusive government.
This is why tax competition is such an important force for good policy. Even bad lawmakers are compelled to do the right thing when they fear that the geese that laid the golden eggs will fly across the border.
Ireland really deserves a lot of the credit here. By slashing the corporate rate from 50% to 12.5%, Irish leaders turned their economy from the sick man of Europe into the Celtic tiger. But the global effect is even bigger. In order to compete with Ireland, nations all over Europe and around the globe are racing to lower their corporate tax rates.
Tax competition is also playing a role in the global flat-tax revolution. 25 years ago, Hong Kong was the only recognizable flat-tax jurisdiction. Today, there are dozens of flat-tax jurisdictions, including Russia, Slovakia, Iceland, and Estonia.
Now for the bad news. Not surprisingly, politicians from high-tax nations don’t like tax competition. They resent being forced to lower tax rates. Much like the owner of a town’s only gas station, they want captive customers who have no choices. These politicians are trying to undermine tax competition. Working through the Organization for Economic Cooperation and Development (OECD), an international bureaucracy based in Paris, they want to hinder the flow of jobs and investment from high-tax nations to low-tax nations.
Source: International Man
The Era Of Widespread Biometric Identification And Microchip
Implants Is Here!
Are you ready to have your veins scanned every time you use
your bank account? Are you ready to use a "digital tattoo" or a
microchip implant to unlock your telephone? Once upon a time we
read about such technologies in science fiction novels, but now
they are here.
The era of widespread biometric identification and
microchip implants is upon us, and it is going to change the way
that we live. Proponents of these new technologies say that they
will make our private information and our bank accounts much more
secure. But there are others that warn that these kinds of "Big
Brother technologies" will set the stage for even more government
intrusion into our lives. In the wrong hands, such technologies
could prove to be an absolute nightmare.
Barclays (UK) has just announced that it is going to become the first
major bank in the western world to use vein scanning technology to
control access to bank accounts. There will even be a biometric
reader that customers plug into their computers at home ...
Vein recognition technology is used by some banks in Japan and
elsewhere at ATM machines, but Barclays said it is the first bank
globally to use it for significant account transactions.
But Barclays is not the only one that is making a big move into
Alibaba, the giant Chinese online retailer, is integrating
fingerprint scanning into its Alipay Wallet app.
Cell phone security is another area of great concern these days. If
someone can get a hold of your phone and unlock it, that person
can potentially do all sorts of damage.
So Motorola has developed a "digital tattoo" that will be used to ensure that
only the owner of a phone is able to unlock it (see video above).
As AsiaOne reports, companies regard Indonesia, Myanmar and Vietnam as the best prospects for expansion once ASEAN's economic integration takes effect next year, according to a new report.
These three nations have long been regarded as the most difficult markets to penetrate but firms hope the ASEAN Economic Community will open new opportunities.
The Boston Consulting Group (BCG) survey found 40 to 50 per cent of the 230 business and government leaders it polled from within and outside ASEAN saying conditions in Indonesia, Myanmar and Vietnam are challenging due to issues such as protectionism and limited infrastructure.
But the three nations are also seen as having attractions such as growing numbers of affluent households and abundant natural resources.
Things are rapidly shifting from bad to worse for PIMCO.
In a triple whammy this morning, Bloomberg reports the Total Return Fund ETF (managed previously by Bill Gross) has suffered $446 million outflows (or over 12.5% of assets) so far; Morningstar downgrades the fund from 'gold' to 'bronze' citing "uncertainty regarding outflows and the reshuffling of management responsibilities".
Perhaps most concerning - given our previous warnings over bond market illiquidity - The FT reports, US regulators are monitoring trading and fund flows surrounding PIMCO's Total Return Bond fund, warning investors they should contemplate the unintended consequences of pulling their money and the possibility of systemic risk disruptions, fearful of "runs."
Nine Dragons Blog
The latest news & trends online! Don't miss anything by subscribing to our Newsletter!