New leasing measures aid reform
Updated: 2015-08-27 06:59
By Zhao Yinan(China Daily)
|
|||||||||||
An Industrial and Commercial Bank of China Ltd display at an international financial exposition in Beijing. [Photo/China Daily] |
Improved financial requirements will assist companies to invest in better equipment
The Chinese government approved a series of supportive measures on Wednesday for the development of financial leasing, part of the government's efforts to deepen financial reform and ease funding difficulties.
A State Council executive meeting, presided over by Premier Li Keqiang, decided to remove the minimal capital requirement for financial leasing companies when setting up subordinate businesses, streamline administrative procedures for exporting agricultural and medical equipment, and encourage the leasing of equipment in high technology and clean energy sectors, according to a statement released after the meeting.
The move is expected to encourage companies to invest more in better equipment and facilitate the restructuring and upgrading of industries, it said.
Cong Lin, CEO of ICBC Financial Leasing, a specialist leasing operation of the Industrial and Commercial Bank of China, China's largest commercial bank, said the measures will become a blueprint for the industry's development.
ICBC's leasing arm was the first of its type in the country when launched in 2007.
Cong said financial leasing is closely related to the real economy and a support to national strategies, such as the Belt and Road Initiative and its plan to upgrade manufacturing industries by 2025, since these strategies all require large amounts of capital.
"The development of financial leasing will also create more opportunities for international industrial capacity cooperation and the 'going global' of Chinese enterprises," he said.
China's financial leasing market is expected to hit 5 trillion yuan ($780 billion) during the first half of next year to become the world's largest, surpassing that of the United States, according to a report released by the China Financial Leasing Association.
Tian Hui, a research fellow with the Institute for Finance of the State Council's Development Research Center, said financial leasing as an emerging industry has witnessed swift development in recent years, and the industry still boasts great potential for further development.
"A large proportion of financial leasing is in the sector of infrastructure construction, which is in tune with China's investment-driven model of development," Tian said.
For instance, Chinese airlines used to purchase fleets with bank loans, while by the end of 2013, nearly half of commercial airplanes in China were leased, and the proportion is expected to keep growing, according to statistics from the Development Research Center.
The surge in financial leasing activities has been partly fueled by listed Chinese companies tapping the service for cheap credit, Tian said.
Companies in the telecom, agriculture, pharmaceutical, energy and equipment manufacturing sectors are increasingly fond of sale-leaseback, a business model in financial leasing that helps companies obtain financing by renting assets that they sold earlier.
Wednesday's meeting also passed policies to reduce fees collected during the export and import procedures to encourage trade following a slump in exports last month.
Related Stories
China to surpass US as world's largest financial leasing market: report 2015-07-21 17:00
Carlyle Group takes a stake in JIC Leasing 2015-06-30 16:09
Financial leasing company sets up in Tianjin 2015-06-09 17:53
Bain to buy 80% stake in leasing firm Lionbridge 2014-10-17 09:57
Leasing firms to enter asset-backed securities sector 2014-06-26 07:03
Today's Top News
11 under investigation and 12 detained over Tianjin explosions
Born in captivity, raised in freedom
Too hard to say goodbye to Tibet: China's Jane Goodall
Suspect in Virginia TV shooting had history of workplace issues
Hungary scrambles to confront migrant influx
Bank lowers lending rate to ease debts
Black Monday brings focus onto China's markets, currency
Two US TV journalists shot dead
on air
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
V-Day parade for 70th WWII anniversary |
Tianjin blasts: Death, damage and bravery |
NE China: From powerhouse to poor relation |
Worlds apart in a different class |
Road map points way for new industrial cluster |
Plan to teach pupils practical skills welcome |