The Renminbi’s Journey to the World

As China's currency becomes more popular internationally, the country will have less need to hold US dollar assets.

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BEIJING – Recently, HSBC bank released an upbeat survey predicting that China’s currency, the renminbi (RMB), will become one of three global settlement currencies (alongside the dollar and euro) sometime this year. It seems that the RMB’s internationalization has been progressing without anyone really noticing. The key remaining questions concern whether or not the RMB will become an important international currency anytime soon, and whether it is poised to pose a serious challenge to the US dollar’s domination of the international monetary system.

 

China has made progress in the use of the renminbi (RMB) as a settlement currency [GALLO/GETTY]

An international currency is used and held beyond the issuing country’s borders, and plays the role of unit of account, medium of exchange, and store of value for residents and non-residents alike. Certainly, there are many potential benefits for China to be gained from the RMB’s internationalization:

·        Elimination of exchange-rate risks to which Chinese firms are exposed;
·        Greater funding efficiency for Chinese financial institutions, thus strengthening their competitiveness in global financial markets;
·        A boost to China’s trade with its neighbors, owing to the reduction in transaction costs;
·        Less need for China to hold US dollar assets and risk capital losses on the country’s foreign-exchange reserves;
·        Eventual status as one of the world’s major reserve currencies, which would provide China more freedom to maneuver in domestic and international economic policy.

China’s enthusiasm for RMB internationalization since 2009 partly reflects its frustration with the lack of progress in reforming the international financial architecture, and with the state of regional financial cooperation. Chinese officials believe that RMB internationalization is a way for China to set its own agenda without being overly constrained by external conditions beyond its control.



Thus far, China has made significant progress in the use of the RMB as a settlement currency, in the issuance of RMB-denominated bonds, and in signing currency-swap agreements with foreign central banks. RMB deposits in Hong Kong are growing exponentially.

Despite these achievements, however, RMB internationalization could still easily go awry. For example, various incentives have been provided to encourage enterprises to use the RMB to settle transactions. But, with an undervalued exchange rate and strong expectations for the RMB to appreciate in the future, foreign importers of Chinese products refuse to use the RMB to settle transactions, while foreign exporters are happy to accept RMB. As a result, even with the same trade balance, China ends up with more foreign-exchange reserves, though using the RMB as a settlement currency is supposed to reduce their accumulation.

Indeed, so far, RMB internationalization has shown a clear pattern of asymmetry – and not only as a settlement currency for China’s imports, but not for exports. RMB-denominated bonds meet strong demand, yet non-residents have no great incentive to issue them. And, while foreign lenders are happy to extend RMB loans, they are not welcome by foreign borrowers. Given strong expectations of RMB appreciation, internationalization will inevitably lead to a serious currency mismatch, with possibly detrimental consequences for China’s welfare.

A more fundamental problem for RMB internationalization is what it implies for China’s capital controls. Although the internationalization of a currency is not tantamount to capital-account liberalization, the degree of internationalization is conditional on capital-account liberalization. In fact, internationalization of the RMB has opened a new hole in China’s wall of capital controls. The big increase in RMB deposits in Hong Kong is a case in point.

When a currency endures a prolonged process of one-way appreciation, speculative capital aimed at exchange-rate arbitrage is bound to seek all chances to flow in. Hot money will increase currency appreciation pressure and complicate macroeconomic management. The profit-taking by speculators at the end of the game will lead to huge welfare losses to the recipient country, in this case China.

Fear of hot money was the main reason why China refused to de-peg the RMB from the dollar until July 2005. While China did decide to allow the RMB to appreciate gradually after that, it has relied on capital controls to prevent hot money from flowing in. The controls are leaky, to be sure, but they have worked (so far), which is why China has effectively maintained macroeconomic stability over the years.

The key objective of China’s capital controls is to prevent non-residents from holding domestic RMB-denominated assets that are unrelated to trade and long-term capital flows. But RMB internationalization encourages non-residents to hold more RMBs and RMB-denominated assets. As a result of RMB internationalization, RMB deposits held by Hong Kong residents have reached RMB370 billion ($57 billion), and the amount may reach RMB1 trillion by the end of the year.

One might wonder what difference there is between hot money and RMB deposits held by non-residents. The answer depends on why non-residents hold these deposits. The attraction of the RMB should come from China’s strong economic fundamentals and faith in its economy. If it comes from expectations of RMB appreciation, the success of RMB internationalization can be easily reversed and will cause more problems for China’s monetary authority to solve in the future.

Fortunately, China’s monetary authority has already noticed the subtlety of the distinction between legitimate demand for RMB-denominated assets and hot money. This means that the pace of RMB internationalization could become more measured than international investors have expected.

While internationalization of the RMB is necessary (and inevitable), it should be guided by market principles and pursued in a cautious manner. To get the sequence of policy adjustments right is vital. In any case, the RMB’s path to becoming a truly international currency promises to be a bumpy one.

By Yu Yongding, currently President of the China Society of World Economics, is a former member of the monetary policy committee of the Peoples' Bank of China and former Director of the Chinese Academy of Sciences Institute of World Economics and Politics.
 

Copyright: Project Syndicate, 2011. www.project-syndicate.org

They can try to ‘delay and pray’ but the euro is running out of time!

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As a doomsayer from the start, who has written several times on the subject, I have recently been reluctant to burden my readers with more jeremiads about the euro.

'Why is the euro in crisis? Because it was fundamentally flawed at its inception' Photo: GETTY

But fasten your seatbelts. Here I go again. My excuse is that this crisis keeps surprising the unwary. There is so much to say that I will have to have several bites.

Before we can find solutions, which I will discuss at a later date, first the causes. Why is the euro in crisis? Because it was fundamentally flawed at its inception. Only good luck, strong economic growth and enlightened economic management could keep it together. In fact, the eurozone has had to suffer the opposite of all three.

Giving up sovereign currencies is a serious challenge. Exchange rates act as a safety valve. When you remove them, the pressure either has to be reduced or it will find some other way out. In a fixed exchange rate system, such as the ERM, currency speculation could and did break the system. Advocates of the euro project drew comfort from the fact that, by contrast, a full monetary union is immune from such attacks.

It was recognised that economic and financial pressure might still find an outlet as countries which diverged from the core had to face higher bond yields. But this would be a good thing. The prospect of it should serve to restrain them. It wasn’t imagined, though, that strain in the bond markets could threaten the stability of the euro itself.

 Failures

Four things went wrong. The first two were private sector failures. First, far from reacting to their newly shackled state, Spain and Ireland went on a private sector spending spree. (Meanwhile, in Greece the government led the bonanza.) Second, in all these cases, the bond markets were hopeless at foreseeing possible difficulties and imposed bond yields only marginally higher than on Germany. Accordingly, they provided no restraint at all.

The third and fourth were failures of government. The authorities presided over an extremely shaky banking system, acutely vulnerable to shocks. And their policies over many years resulted in a high government debt to GDP ratio, not only in the peripheral countries, but also in the supposedly solid core. In common with almost everyone else, the European authorities grossly underestimated the possibility of sovereign default as a realistic threat and market worry, and underestimated its capacity to cause a full scale banking crisis.



The fact that the political elite ploughed on with the euro project was the result of profound arrogance. Where possible, electorates would be denied the chance to say whether they approved of the euro and other aspects of integration. Where they had to have their say, they would be compelled to go on voting until they said “yes”. The current crisis has the same roots. The project’s difficult economics would be overcome by the politics. The Brussels establishment would ensure that everything turned out all right.

But it hasn’t. Now the economics threaten to overwhelm the politics. Greece’s sovereign indebtedness is so high that it is impossible to see how it can honour its debts without outside help (ie. gifts). And the economy will go on contracting for years. There will have to be “an event”. The only issues are when this will happen; who will pick up the tab; and what it will be called.

 Nomenclature

This being the European Union, nomenclature is extremely important. Of course it won’t be called a default – I doubt it will be called anything beginning with “de”. Bad things begin with de – like decline and defeat. It will be called something beginning with “re”. Good things begin with “re”, including rebirth and renewal – and restructuring and reprofiling. But default it will be.

Who picks up the tab is important because the bill could seriously undermine some banks. Remarkably this threat includes the ECB itself because it has taken on a large amount of Greek debt. The rows over the bill are likely to delay any sort of solution and to poison the atmosphere between member states. Meanwhile, the fate of the European banking system will be hanging by a thread.

This is why the “when” issue is so important. The current approach is to try to stave off the event until things get better. You will notice that this bears a striking similarity to the sophisticated strategy adopted by British banks in the face of dud commercial property loans, namely “delay and pray”. Mr Micawber had the same idea but expressed it differently.

So even though the markets cannot cause the euro to break up by exchange rate pressure, they can cause an internal financial crisis worse than any currency panic. The prospect, or the reality, of such a crisis could yet cause some European leaders to precipitate the end of the euro as we know it.

By Roger Bootle who is managing director of Capital Economics and economic adviser to Deloitte.

Blogging can really pay off

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My Blog Is Also Paying My Bills

By KATE MURPHY                                       Jim Wilson/The New York Times     

Darren Kitchen, shown with Shannon Morse, a host on his webcast, sells items on his computer-hacking Web site.

Casting the digital equivalent of a message-in-a-bottle into the Internet’s vast sea of content, many people start Web sites or blogs hoping that they will find an appreciative audience for their precocious parrot videos, cupcake recipes or pithy commentary on everyday life. The dream, of course, is that they will develop a large and loyal following — and potentially profit from it.

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• Times Topic: Blogs and Blogging (Internet)

Kyle Johnson

Molly Wizenberg, 32, of Seattle, started her blog, Orangette, in 2004. It led to the publication last year of her book, “A Homemade Life: Stories and Recipes From My Kitchen Table.”

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Bron Johnson

Participants in a workshop on personal growth in Las Vegas, a result of Steve Pavlina's blog. He said he made $40,000 from the workshops.

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Cloud photos taken by Kelly DeLay on his Web site, the Cloud 365 Project. Visitors donate a total of $200 to $400 a month to the site. 

While most of these self-publishers don’t attract the attention of anyone other than indulgent family and friends, there are those who find wider recognition and some income. What the successful have in common is a passion for their subject and a near-compulsion to share what they know. Advertising, merchandising, offline events, book deals, donations and sometimes sheer luck also play a part.

“My advice is to choose a topic you’ll never get tired of,” said Stephanie Nelson, 47, of Atlanta, a homemaker who founded CouponMom.com in 2001 to share tips on saving money by using coupons. “The first three years I made no money at all, so I had to love what I was doing to keep going.”

Ms. Nelson said her Web site now has more than 3.8 million visitors a month, and the income it generates supports her family of four — allowing her husband to retire early from his corporate job five years ago. “I’m still not tired of it,” Ms. Nelson said.

Half of the site’s revenue comes from Google’s AdSense service, and the other half is from companies like Groupon and LivingSocial that buy ads directly from her. AdSense generates ads based on the words that appear on Web pages. For example, if a blog post is about dogs, ads for dog food or dog grooming might appear beside it.

Many of the Google ads generate income only if people click on them — usually yielding a fraction of a cent per click. It’s also possible to get paid every time a Google ad appears on a page. Rates are determined in part by advertisers bidding in an online auction.

Other companies like BuySellAds.com and BlogAds allow self-publishers to determine what they want to charge for placing an ad on their sites. They then match sites with eager advertisers for a percentage of ad sales — 14 to 30 percent is typical.

Federated Media, which is a sort of Web talent management company, is more selective, negotiating rates on behalf of independent content creators it agrees to represent. In general, online ad rates vary widely, from $54,000 a day for an ad on a popular blog like PerezHilton.com to $10 a month for an ad on the cartoon blog The Soxaholix. (The New York Times Company is an investor in Federated Media.)

Clayton Dunn, 32, and Zach Patton, 31, the bloggers behind The Bitten Word, make around $350 a month from pay-per-click Google ads, and in commissions from Amazon.com when readers follow links to cooking gadgets, books and magazine subscriptions they recommend. Mr. Dunn and Mr. Patton, who live in Washington and blog about recipes they have tried from popular magazines, started the site in 2008 and now have about 150,000 visitors a month.

“It more than pays for the groceries,” said Mr. Dunn, who added that they are further compensated by readers who may give them delicacies like fresh avocados and Hawaiian ginger syrup.

For those who want to generate more income through advertising, Jonathan Accarrino of Hoboken, N.J., founder of the technology news and how-to blog MethodShop.com, advises having contextual ads, which are highlighted words in posts that provide a link to the vendor of a relevant product or service. A commission is paid on resulting sales.

Adding video to a post is another strategy that Mr. Accarrino said contributes to his blog’s six-figure yearly income: “I’ll record video walk-throughs of my tutorials and upload them to Blip.tv,” a video sharing service similar to YouTube. And like YouTube, Blip.tv gives users the option to run ads with their videos. These generate $1 to $10 for every thousand views, depending on the advertiser.



Indeed, many video bloggers, or vloggers, make money this way. Sheila Ada-Renea Hollins-Jackson, a 22-year-old makeup artist in Farmington, Mich., makes up to $200 a month from the 63 videos about beauty treatments she has posted on YouTube since 2008. “It pays my cellphone bill,” she said. Vloggers either apply or are invited by YouTube to display ads based on demonstrated viewership or outstanding content.

Selling merchandise on a vlog, blog or personal Web site can bring in even more cash. Darren Kitchen, 28, of San Francisco said he makes $5,000 a month selling stickers, T-shirts, baseball caps and computer hacking tools on his Web site, Hak5.org, which offers a weekly video show about computer hacking.

“It’s crazy how many people want the stickers,” said Mr. Kitchen, who started Hak5 in 2005 and says he has 250,000 monthly viewers.

Book deals are the ultimate goal for many bloggers who are aspiring writers. Molly Wizenberg, 32, of Seattle, started her blog, Orangette, in 2004 as a way to hone her writing skills after dropping out of a Ph.D. program in anthropology.

Her musings about food and life attracted 350,000 visitors a month and the attention of Simon & Schuster, which led to the publication last year of her book, “A Homemade Life: Stories and Recipes From My Kitchen Table.” Last month she signed a contract to write another book. “It’s beyond what I ever imagined,” Ms. Wizenberg said.

Some people simply ask their fans and followers to make donations to support their creative efforts. Kelly DeLay of Frisco, Tex., said he gets $200 to $400 a month from visitors to his Web site, The Clouds 365 Project, where he posts a daily photograph of cloud formations. “People can be very generous,” said Mr. DeLay, who began taking pictures of clouds full-time after he was laid off from his job as an interactive media director last year.

Charging for content is also an option. Collis Ta’eed, 31, of Melbourne, Australia, founded FreelanceSwitch.com, which gives practical advice to freelancers, and Tuts+, which offers technology-related tutorials. He said he brought in $150,000 a month from his sites, most of it from premium content — primarily tutorials and e-books.

“People will pay for content if you offer them something of value that is authentic and is generally useful,” said Mr. Ta’eed, who said his two blogs together have 6.4 million visitors a month. One example of useful content is FreelanceSwitch’s job board, which brings in $7,000 a month, he said. Job posters pay nothing; job seekers pay $9 a month.

And sometimes people will pay to attend events organized by bloggers they admire.   Steve Pavlina of Las Vegas said he made $40,000 from weekend workshops that were an outgrowth of his blog,
StevePavlina.com, which focuses on issues related to personal development. He started the blog in 2004 and says it has 2.5 million visitors a month. Besides workshops, he said he made about $100,000 a month in commissions from sales of products like speed-reading courses and high-speed blenders that he recommends on his blog.

“I tell people if they want to start a blog just to make money, they should quit right now,” Mr. Pavlina said. “You have to love it and be passionate about your topic."

Hands off the Arab spring

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Soumaya Ghannoushi The Guardian

The US wants to turn the Arab revolutions into eastern Europe part 2. It is destined to fail

The first wave of Arab revolutions is entering its second phase: dismantling the structures of political despotism, and embarking on the arduous journey towards genuine change and democratisation. The US, at first confused by the loss of key allies, is now determined to dictate the course and outcome of this ongoing revolution.

What had been a challenge to US power is now a "historic opportunity", as Barack Obama put it in his Middle East speech last week. But he does not mean an opportunity for the people who have risen up; it is a chance for Washington to fashion the region's present and future, just as it did its past. When Obama talks of his desire "to pursue the world as it should be" he does not mean according to the yearnings of its people, but according to US interests.

And how is this new world to be built? The model is that of eastern Europe and the colour revolutions; American soft power and public diplomacy is to be used to reshape the socio-political scene in the region.

The aim is to transform the people's revolutions into America's revolutions by engineering a new set of docile, domesticated and US-friendly elites. This involves not only co-opting old friends from the pre-revolutionary era, but also seeking to contain the new forces produced by the revolution, long marginalised by the US.

As Obama put it last week: "We must … reach the people who will shape the future – particularly young people … [and] provide assistance to civil society, including those that may not be officially sanctioned."

To this end he has doubled the budget for "protecting civil society groups" from $1.5m to $3.4m.

The recipients are not only the usual neoliberal elements, but also activists who spearheaded the protest movements, and mainstream Islamists.



Programmes aimed at youth leaders include the Leaders for Democracy Arabic project, sponsored by the US state department's Middle East partnership initiative.

A number of Arab activists, including the Egyptian democracy and human rights activist Esraa Abdel Fattah, were invited to an event hosted by the Project on Middle East Democracy in Washington last month – one of many recent conferences and seminars. Meetings between high-ranking US officials – such as the House majority leader, Steny Hoyer – and the Muslim Brotherhood took place in Cairo last month, while the deputy chairman of Tunisia's Islamist Ennahda party has recently returned from a visit to Washington to "discuss democratic transition".

Washington hopes that these rising forces can be stripped of their ideological opposition to US hegemony and turned into pragmatists, fully integrated into the existing US-led international order. Dogma is not a problem, as long as the players agree to operate within parameters delineated for them, and play the power game without questioning its rules. It remains to be seen, however, if they risk losing their popular base in return for US favours.

Containment and integration are not only political, but economic, to be pursued through free markets and trade partnerships in the name of economic reform. Plans "to stabilise and modernise" the Tunisian and Egyptian economies – already being drafted by the World Bank, IMF and European Development Bank at Washington's behest – are due to be presented at this week's G8 summit.

A $2bn facility to support private investment has been announced, one of many initiatives "modelled on funds that supported the transitions in eastern Europe".

As usual, investment and aid are conditional on adoption of the US model in the name of liberalisation and reform, and on binding the region's economies further to US and European markets under the banner of "trade integration". One wonders what would be left of the Arab revolutions in such infiltrated civil societies, domesticated political parties, and dependent economies.

However, although the Obama administration may succeed with some Arab organisations, its bid to reproduce the eastern European scenario may be destined to fail. Prague and Warsaw looked to the US for inspiration, but for the people of Cairo, Tunis and Sana'a the US is the equivalent of the Soviet Union in eastern Europe: it is the problem, not the solution. To Arabs, the US is a force of occupation draped in a thin cloak of democracy and human rights.

No one could have offered stronger evidence of such a view than Obama himself, who began his Middle East speech with eulogies to freedom and the equality of all men, and ended it with talk of the "Jewishness of Israel", in effect denying the citizenship rights of 20% of its Arab inhabitants and the right of return of 6 million Palestinian refugees. In vain does the US try to reconcile the irreconcilable – to preach democracy, while occupying and aiding occupation.

The half-past-six JPA scholarships: half-boiled eggs and half-baked moves...

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ON THE BEAT WITH WONG CHUN WAI

The former have had bad press but they may be better than they are made out to be. But the latter cannot be excused at all.

I HAVE finally turned 50. The day started off with a breakfast of two half-boiled eggs with the right dash of soya sauce and pepper, and a cup of hot Milo.

It’s a simple pleasure in life and certainly most Malaysians would describe our traditional breakfast as heavenly.

I am sure it’s a Malaysian creation. I still do not know why Singapore has not staked a claim on this brilliant culinary work.

Maybe Singapore refuses to be associated with anything that’s regarded as half-measured, half-done or half-boiled. But hey, our national tolerance for mediocrity is higher, so if it tastes good, who are others to tell us otherwise.

I do not know whether our penchant for half-boiled eggs has anything to do with the national psyche but let’s not allow jealous foreigners to divide us. We do not want Perkasa to turn this into a nationalist frenzy over half-boiled eggs and we certainly don’t want Ibrahim Ali to issue “ada telur” dares to imagined foes.

Half-boiled eggs would be frowned upon in Western countries, where most hotel kitchens refuse to accept such orders as the eggs would not be cooked according to the stipulated health requirements.

Westerners, who cannot stomach what we eat, feel they could be exposed to salmonella, the bacteria that can lead to food poisoning. So never bother asking for half-boiled eggs during your holidays overseas.

Besides, what’s half-boiled eggs without kicap?

Older Malaysians have been taught from young that to stay healthy, we should have two half-boiled eggs every morning. I really do not know how, when and why some medical experts suddenly concluded that eating eggs, especially with the yolks – the best part of the eggs – can ruin your health.

One large egg is said to have 213mg of cholesterol, all found in the yolk, and eating too much of it can lead to a high cholesterol level. That’s what was said in one story I googled.

But I have also read that former British Prime Minister Margaret Thatcher had a strict diet of 28 eggs a week plus steak, salads and her favourite tipple – whisky – each time she campaigned.

That’s according to personal documents published by the Margaret Thatcher Archive Trust. She is turning 86 this year and we know for sure that this Iron Lady remains one of the best leaders the world has seen so far.

I am pretty sure Tony Blair and Gordon Brown didn’t like eggs. But I am convinced that Tan Sri Rafidah Aziz and Datuk Seri Dr Ng Yen Yen also eat plenty of eggs. They are sharp and look good. Gutsy, for sure, and they make many men politicians look like wimps.

Datuk Seri Dr Mohamad Khir Toyo conti­nues to defy nature. But I’m not sure if it’s half-boiled eggs or tempeh, a popular Javanese soy product.

I do not know why but eggs always seem to fly in the direction of some politicians. Joining the fray over the award of Public Service Depart­ment (PSD) scholarships, maverick minister Datuk Seri Mohamed Nazri Abdul Aziz has finally said the controversy should be discussed by taking into consideration the views of other parties, including the MCA and Gerakan.

He seems to miss the point – no one is saying that all PSD scholars should be sent overseas. What the applicants have complained about is that there have been those with less than 8A+, some allegedly with just 6A+, who have been sent overseas by the Government.

It does not matter what race or religion the applicants are but if you are not a top achiever, what are the possibilities of these scholars entering top schools like Oxford, Cambridge, Harvard or Imperial College London?

It does not make sense to use taxpayers’ money to admit them into middle or low-level universities.

Our grading system has already been questioned by top foreign universities. The high string of distinctions mean nothing to them now.

Yes, we are all aware the Prime Minister has promised that students who obtained 8A+ and above are eligible for PSD scholarships to study either locally or abroad. It’s a fantastic decision and everyone should be clear about it.

But procedures on scholarships should be clear and open. It really doesn’t make sense when there are mismatches, bad decisions and even questionable moves. It is precisely this resentment that has led to eggs being thrown at the faces of the PSD officials.

All the good intentions of the Government are now being affected because of these half-boiled, or rather half-baked, measures.

Good students deserve scholarships

I AM very disappointed over the current distribution of the Public Service Department (JPA) scholarships.
As the chairman of Higher Education Bureau, National MIC Youth, I strongly believe that Education should be fair to all students irrespective of race and religion.

All Malaysian citizens must have equal rights to a good education. Many work hard to earn their good grades.

Nobody is questioning the Federal Constitution here, so there is no need for certain groups to say that we have gone against the Constitution when we raise issues affecting the community.

What we are asking is for government scholarships to be given to deserving students regardless of their race and religion.

These students are the creme de la creme. Those who scored 8A+ and above expect to be given a scholarship.

While some of the top scorers are lucky enough to be “grabbed” by neighbouring countries for their outstanding results, many are forced to look elsewhere for funding

There are also parents, who have to use up their life savings to send their children overseas. Can anyone blame these students if they do not come home after graduation?

In recent years, our government has been trying to woo overseas Malaysians who have made great strides in their chosen fields to come home, simply because of their expertise and knowledge.

It would be such a waste to lose these top achievers to other counntries, and then complain later that there is a brain drain.

MAHAGANAPATHY DASS
Chairman, Higher Education Bureau
National Malaysian Indian Congress (MIC) Youth

Social media and networking

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By TEE LIN SAY linsay@thestar.com.my

Guy Clapperton (pic), the author of ‘This is Social Media: tweet, blog, link and post your way to business success’ was recently in Kuala Lumpur to promote his updated book.

First published in 2009, this version offers new insights on using the social media as an efficient and measurable way for people to market their business.

Organisations, whether larger or small, are using social media and social networking to build robust communities of followers, to stay ahead of the competition and increase profits.

For business owners who want access to social networking tactics and reach new customers, Guy has simple, practical and real life examples for them.

SBW: What made you decide to write a book on social media?
 GC: Well, I freelance in the UK for The Guardian and The Times and I have been writing on small businesses and technology for many years. Back in 2007 to 2008, I felt I needed to get my brain around what was happening in the world of social media. There was none. My brain got into gear. There was no book on this subject, and this was something I was familiar with. I wrote to John Wiley Publications, and got a meeting with the director! They subsequently passed the book to Capstone Publishing, and thats how it all started.

What are some of the new developments included in your updated book since the first was published in 2009?
Well, I got a critic who mentioned that I was too dismissive about web designers in my first book. That could have been true. So, I wrote a little bit more on web designers this time around. I also expanded on Foursquare, which is one of the first social networks that really took advantage of mobile networks from the start.

What is different in your book compared with other social media books?
Buy my book because the other books are all Americans! (Laughs) Anyway, my book uses a common sense approach and incorporates lots of business and budgeting strategies. You know what’s in it for a business, how you can get involved, and how to incorporate social networking into your business plan.



What are some of the developments in social media that will shape our future moving forward?
Mobile social media is going to become very important. Imagine someone standing outside your business premises and then asking on Twitter quickly whether a few thousand people know anything good or bad about it. That’s going to be important.

Do you think Malaysian or Asian companies in general, have yet to fully leverage on the benefits of social media? What are the simple things they can do to use social media to enhance their businesses?
Clearly, having been here only a couple of days I’m no expert in Malaysian businesses. Several which are international as well as Asian - LG Electronics, Samsung and others - have done well and I understand AirAsia has been a very strong performer in social media. If they’re starting now I think the best thing to do is to find which social media their clients use and start marketing on those.

Do you think that social media should be one of the ways for companies to market their products? Will companies that refuse to use social media be left behind?
It’s certainly going to be part of the mix. Companies that refuse social media can have different reasons. They might have found their customers aren’t interested, which would be a good reason for not spending time on it. I’d certainly recommend looking again in a couple of years if you don’t think social media is right for your business at the moment - the customer is changing.

What are some of the misconceptions about social media?
People underestimate the cost incurred, they think that there is no need to pay. They don’t value the time. Hey, you’ve got to pay the guy monitoring your media traffic.

Also, social media works well only if done correctly and properly. You need to find out what the customer wants and target the right group of customers rather than sending a mass message to everyone. Also, people won’t be actively seeking you out - you need to get the message out.

You’re writing another book “This is Social Commerce” to be launched by year end. What was the inspiration for that? How different will it be from your current book?
It’s a continuation in many ways. The first book is the introduction, the second develops the theme a little, talks to more businesses in depth and looks at some of the opportunities which have arisen only because social media has made them possible.

Was it always your dream to publish your own book? How exhilarating was it, to see your books on the shelves?
I’ve wanted to be an author ever since I was a child and finding the book on the shelves was as magical as I’d hoped. Finding a big picture of me standing next to it in the MPH Megatore was a bit of a shock!

Will you ever consider writing fiction some time in the future?
I’d love to but to be honest I’m not sure that’s where my talent lie. My current publisher doesn’t publish fiction so I’d have to start all over again. And I do like what I do for a living at the moment - trying to go into another field might set me up for a fall.

World's Richest & Poorest Governments

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We know the world's richest man is Carlos Slim Helu of Mexico, followed by Bill Gates and Warren Buffet of USA  . How about governments? Which countries government is the richest (having most money that is, in US$. If you are expecting North American and European nations, you might be disappointed. While the countries look rich, wealthy European nations can't withstand a prolonged major financial crisis, just like Greece . The USA might have the biggest economy, but the American government is not at all rich; in fact, it can't even take out $150bn if asked to now without resorting to borrowing. To date the US government has borrowed $14 trillion! The UK , likewise, while the country/people are rich, the government isn't. The UK government's debt stands at $9 trillion now. World's Richest Government   Richest governments after 2008-2009 financial crisis: 1. China National reserves: $2,454,300,000,000 2. Japan National reserves: $1,019,000,000,000 3. Russia National reserves: $458,020,000,000 4. Saudi Arabia National reserves: $395,467,000,000 5. Taiwan National reserves: $362,380,000,000 6. India National reserves: $279,422,000,000 7. South Korea National reserves: $274,220,000,000 8. Switzerland National reserves: $262,000,000,000 9. Hong Kong , China National reserves: $256,000,000,000 10. Brazil National reserves: $255,000,000,000 Here are the rest, in million US $: 11 Singapore / 203,436 12 Germany / 189,100 13 Thailand / 150,000 14 Algeria / 149,000 15 France / 140,848 16 Italy / 133,104 17 United States / 124,176 18 Mexico / 100,096 19 Iran / 96,560 20 Malaysia / 96,100 21 Poland / 85,232 22 Libya / 79,000 23 Denmark / 76,315 24 Turkey / 71,859 25 Indonesia / 69,730 26 United Kingdom / 69,091 27 Israel / 62,490 28 Canada / 57,392 29 Norway / 49,223 30 Iraq / 48,779 31 Argentina / 48,778 32 Philippines / 47,650 33 Sweden / 46,631 34 United Arab Emirates / 45,000 35 Hungary / 44,591 36 Romania / 44,056 37 Nigeria / 40,480 38 Czech Republic / 40,151 39 Australia / 39,454 40 Lebanon / 38,600 41 Netherlands / 38,372 42 South Africa / 38,283 43 Peru / 37,108 44 Egypt / 35,223 45 Venezuela / 31,925 46 Ukraine / 28,837 47 Spain / 28,195 48 Colombia / 25,141 49 Chile / 24,921 50 Belgium / 24,130 51 Brunei / 22,000 52 Morocco / 21,873 53 Vietnam / 17,500 54 Macau / 18,730 55 Kazakhstan / 27,549 56 Kuwait / 19,420 57 Angola / 19,400 58 Austria / 18,079 59 Serbia / 17,357 60 Pakistan / 16,770 61 New Zealand / 16,570 62 Bulgaria / 16,497 63 Ireland / 16,229 63 Portugal / 16,254 64 Croatia / 13,720 65 Jordan / 12,180 66 Finland / 11,085 67 Bangladesh / 10,550 68 Botswana / 10,000 69 Tunisia / 9,709 70 Azerbaijan / 9,316 71 Bolivia / 8,585 72 Trinidad and Tobago / 8,100 73 Yemen / 7,400 74 Uruguay / 8,104 75 Oman / 7,004 76 Latvia / 6,820 77 Lithuania / 6,438 78 Qatar / 6,368 79 Cyprus / 6,176 80 Belarus / 6,074 81 Syria / 6,039 82 Uzbekistan / 5,600 83 Luxembourg / 5,337 84 Guatemala / 5,496 85 Greece / 5,207 86 Bosnia and Herzegovina / 5,151 87 Cuba / 4,247 88 Costa Rica / 4,113 89 Equatorial Guinea / 3,928 90 Ecuador / 3,913 91 Iceland / 3,823 92 Paraguay / 3,731 93 Turkmenistan / 3,644 94 Estonia / 3,583 95 Malta / 3,522 96 Myanmar / 3,500 97 Bahrain / 3,474 98 Kenya / 3,260 99 Ghana / 2,837 100 El Salvador / 2,845 101 Sri Lanka / 2,600 102 Cambodia / 2,522 103 Côte d'Ivoire / 2,500 104 Tanzania / 2,441 105 Cameroon / 2,341 106 Macedonia / 2,243 107 Dominican Republic / 2,223 108 Papua New Guinea / 2,193 109 Honduras / 2,083 110 Armenia / 1,848 111 Slovakia / 1,809 112 Mauritius / 1,772 113 Albania / 1,615 114 Kyrgyzstan / 1,559 115 Jamaica / 1,490 116 Mozambique / 1,470 117 Gabon / 1,459 118 Senegal / 1,350 119 Georgia / 1,300 120 Panama / 1,260 121 Sudan / 1,245 122 Zimbabwe / 1,222 123 Slovenia / 1,105 124 Moldova / 1,102 125 Zambia / 1,100 126 Nicaragua / 1,496 127 Mongolia / 1,000 128 Chad / 997 129 Burkina Faso / 897 130 Lesotho / 889 131 Ethiopia / 840 132 Benin / 825 133 Namibia / 750 134 Madagascar / 745 135 Barbados / 620 136 Laos / 514 137 Rwanda / 511 138 Swaziland / 395 139 Togo / 363 140 Cape Verde / 344 141 Tajikistan / 301 142 Guyana / 292 143 Haiti / 221 144 Belize / 150 145 Vanuatu / 149 146 Malawi / 140 147 Gambia / 120 148 Guinea / 119 149 Burundi / 118 150 Seychelles / 118 151 Samoa / 70 152 Tonga / 55 153 Liberia / 49 154 Congo / 36 155 São Tomé and Príncipe / 36 156 Eritrea / 22 Big national reserves doesn't guarantee prosperity however, for instance, the yearly expenses for China 's government is $1.11 trillion, their government must always think of economic growth and making more money. The Malaysian gov't overspent $13bn last year, if it goes on like this their reserves can only last for 7 yrs. The Singaporean government overspent $3bn last year, much of it rescuing their banks from financial crisis, if it goes on like this their reserves can last 68 yrs. The Swiss gov't overspent $1bn last year, if it goes on like this their reserves can last 262 yrs. A country normally can borrow up to 100% its GDP, a very strong industrial country or very financial stable nation can borrow up to perhaps 200% its GDP, debts over 250% GDP the country is bankrupted. Greece 's Debts Is 113.40% GDP, In Danger As It Is Not Considered A Strong Industrial Or Financial Country. Iceland Is 107.60%, Also In Crisis As It Is Not So Strong Industrial Or Financially. Singapore Debts Is 113.10%, Not In Hot Water Due To Its Global Financial Hub Status, And Also Its Financial Strength. It's Only Dangerous For Singapore When It Reaches 200% Japan Debts Is 189.30%, Still Under Radar As A Powerful Industrial Nation. It Needs To Panic Only At Around 200% US Has The World Largest Debts, But It Is Only 62% Its GDP, It Is Not In Any Immediate Danger Of Bankruptcy. Zimbabwe Debts Is 282.60% GDP, It Is A Bankrupted Nation. Malaysia Debts Is Currently At 53.70% GDP. Hong Kong And Taiwan Is Doing Pretty Good With Debts At 32-37%GDP South Korea Is Even Better With Debts At 23.5% GDP China Is Very Stable With Debts At 16.90% GDP Russia Is Like A Big Mountain With Debts Only  at  6.30% GDP There Are Only 5 Countries With No Debt (I.E. 0%) : Brunei , Liechtenstein , Palau , Nieu, And Macau Of China .