China leasing industry expanding
By WANG YING in Shanghai (chinadaily.com.cn)Updated: 2014-03-27 15:53
China is well on its way to overtaking the US as the world's largest finance leasing market, with market value expected to grow at a pace of 50 percent annually and to exceed 5 trillion yuan ($807 billion) by 2017, according to industry forecasts.
Finance leasing, also known as capital leasing, relates to sectors such as aviation, maritime shipping, machinery, medical equipment and communications, as well as to infrastructure construction. Equipment is purchased by the lessor and payments are made by the lessee.
"China's financial leasing market is expected to grow at a pace of 50 percent annually, and the nation's total finance leasing market will exceed 5 trillion yuan in four years to 2017," Yang Haitian, leasing association chairman of the China Chamber of International Commerce, said on Wednesday at a forum.
As of the end of 2013, there were about 1,026 financial leasing companies across the nation, growing at a rate of 83.2 percent year-on-year, according to a report issued on Wednesday.
Leasing businesses will see great opportunities in coming years, Yang said.
China Eases Access to Financial Leasing Companies (2013-12)
China's top banking regulator announced on 16 Dec. that it will give the market easier access to financial leasing companies by revising regulations.
Financial leasing companies will be allowed to expand business and set up trial subsidiaries, according to a statement from the China Banking Regulatory Commission (CBRC).
According to the revised regulations, qualified Chinese and foreign commercial banks, domestic manufacturing enterprises and other legal entities, as well as overseas financial leasing companies and other financial institutions, will become eligible to set up financial leasing businesses.
"These revisions will attract more social capital to financial leasing, which can diversify a leasing company's investors and create more effective management," said Li Jianhua, deputy director of the Non-bank Financial Insititutions Supervision Department of the CBRC.
CBRC will implement classification management of financial leasing companies and provide more freedom to qualified players, including asset securitization and bond issuance. These companies are encouraged to cover the leasing business of aircraft and ships.
The CBRC has also drawn up rules concerning the establishment of subsidiaries.
CBRC data show that as of the end of the first quarter this year, the assets of 20 financial leasing companies under the supervision of the CBRC totaled 840 billion yuan (137.4 billion U.S. dollars). Their profits last year exceeded 10 billion yuan.
The CBRC will also solicit public opinion regarding the revision until Jan. 16, 2014.
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