AE&M Focus Group Quarterly Update – Q4 2015

Published on 2016-03-03

HSE compliance costs rising steeply. Although stringent legislation has always been in place in China, only more recently is it being strictly enforced although promising to see the enforcement disparity is also narrowing.

  • HSE compliance costs rising steeply. Although stringent legislation has always been in place in China, only more recently is it being strictly enforced although promising to see the enforcement disparity (against foreign companies versus local companies) is also narrowing. Toughest enforcement around regions like Shanghai and Suzhou.
  • Automotive sector seen new government initiatives for smaller vehicles where there has previously been a lack of supply. Expectations that a second hand market (and spare parts market) will start to develop, particularly in the 2nd and 3rd tier cities.
  • Consolidation of loss making capacity from SOEs. Although still doubts around the “sincerity” of the “reforms”.