BizChina

Job applicants flip through newspapers searching for employment information at a job fair held at the National Agriculture Exhibition Hall in Beijing late last month.

As nation battles to reduce unemployment, analysts say it is shortage of skilled workers, not jobs, that is causing problems. Daniel Chinoy and Wang Xiaotian report from Beijing.

Song Yongliang did everything right. He worked hard, went to college and majored in Russian, which he thought would be practical in his hometown in Northeast China.

In his senior year, he found an internship as a translator and hoped to find a job with a trading company near the Russian border after he graduated in 2008. Then the financial crisis hit.

Analysts say trip reflects importance of China market

BEIJING: Toyota Motor President Akio Toyoda on Monday apologized to Chinese consumers - who make up the world's biggest auto market - over the company's massive global recall.

"The incident had caused worries to Chinese consumers," Toyoda told a packed news conference. "I hereby express my sincere apologies for these worries."

Analysts said the apology to Chinese consumers is significant as it acknowledges the importance of the Chinese market that has become increasingly key to automakers as they struggle with weak global sales. Last year, China overtook the United States as the biggest auto market.

"The China market is very important to Toyota, so I decided to fly here directly from the US in person to deliver my expression of apology and explanation to Chinese consumers in the hope of regaining trust here," said Toyoda, president and CEO of the world's second-largest automaker, and the grandson of the company's founder.

Central government also faces a dilemma in deciding on its interest rate policies.

As inflation rises - it was 1.9 percent in December and 1.5 percent in January - the market has expected an interest rate hike to come sooner or later.

While the real interest rate risks falling into negative territory due to rising inflation, any hasty adjustment of it could hurt enterprises, especially job-creating private companies, and could even shake the newly recovered economy. It could also stoke inflows of speculative capital from overseas.

"While we expect the central bank to deliver 81 base points of rate hikes this year to avoid real rates turning negative, we do not expect aggressive credit tightening to last long," said Nomura Securities economist Sun Mingchun in a recent report.

Most economists forecast that inflation could reach 3 percent in February, when consumption was active thanks to the traditional Spring Festival, which started Feb 14. And they said there was a possibility of inflation rising further in the coming months, partly due to the relatively low base a year ago.

China's stimulus measures were more akin to a blunderbuss than a sniper's bullet. As economist Stephen Green said, "Everything that could be done was done."

But now, there are increasing signs that the country wants to target its policies more precisely.

Following two hikes in the reserve requirement ratio of commercial banks - the proportion of money they must keep aside as reserves - it is widely believed that a new bout of policy tightening has begun.

The hikes came after the authorities imposed a series of real estate-targeted policies late last year, sending an unequivocal signal that the rapid rise in home prices is intolerable, analysts said. Interest rate hikes could also be in the pipeline if inflation continues to pick up.