Small and Medium Enterprises (SMEs) play a vital role in the country's economic development. The current trend of economic growth and the rapid industrial development has made Malaysia as one of the most open economies in the world. In conjunction with the Ninth Malaysian Plan (2006)(2007)(2008)(2009)(2010), the government is devoting and designing the SME development plan to assist the SMEs to meet the new business challenges in the competitive global business environment. The focus of this paper is the discussion of the competitiveness facing SMEs in the global business environment by examining the opportunities and supports from the government. Furthermore, this study also analyses the challenges of Malaysian SMEs in globalize market together with economics turmoil.

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The main purpose of this paper is to examine the relationship between consumer price index (CPI) and producer price index (PPI) in Malaysia. This research considers monthly data of consumer price index and producer price index from January 1986 to April 2007. The Johansen cointegration method suggests that there is long-run equilibrium relationship between these two variables. Both Engle Granger and Toda-Yamamoto causality tests find that there is uni-directional causality running from PPI to CPI.