Market Size of Financial Leasing Industry in China is Expected to be Among the World Largest by 2020

Xinhua Online, Beijing, 7th September                 The General Office of StateCouncil in recent issued Opinions on Accelerating Development of FinancialLeasing Industry (hereinafter referred to as the "Opinions"). TheOpinions advocate the basic principal of adhering to combination of market orientationand government support, integration of development and standardization, connectionof financing and resource integration and considering both home and abroad. Italso raises the goal of by 2020 Chinese financial leasing industry ranksforefront in the world in terms of the market size and competitiveness.

The Opinion clearly defines the main tasks fromfour aspects:

First, reform systems and mechanisms thatimpede finance lease development. Accelerate streamline administration anddelegate power to the lower levels, streamline industrial management system andimprove the management system of related fields. Second, accelerate the developmentof financial leasing in priority areas. Actively promote industrialrestructuring and upgrading, speed up the development of small and mediummicro-enterprise financial leasing services and develop cross-border leasing.Third, support development of innovative financing lease. Promote financialleasing company business model innovation, accelerate the development offinancial leasing supporting industries, and improve the financial leasingcompany's core competitiveness. Fourth, strengthen regulation during and afterthe process of financial leasing business. Improve the industrial regulatorymechanism to enable industrial organizations to play self-regulatory role.

The Opinions also propose five measures to be taken in policyconstruction:

First, build law-based business environment. Study and promulgatespecial legislation for financial leasing industry, establish a soundregulatory system to regulate financial leasing companies, and establish astandardized registration system financing leasing material and create a faircompetitive environment.

Second, improve fiscal policies. Encourage governments at alllevels to purchase and provide public services through financial leasing. End usersof farm machine who buy the machine via financial leasing can enjoyagricultural subsidies for the purchase. Encourage local governments use riskcompensation, reward, discount and other policy tools to guide financialleasing company to increase financing support to small and medium and micro-enterprises.Apply the tax entry of Loan Contract to do computation and allocate subsidy forfinance lease contract. Expand the insurance scale and coverage of financialleasing export credit.

Third, expand financing channels. Encourage banks, insurancecompanies, trust, funds and other financial institutions to increase efforts tosupport financial leasing companies. Support domestic financial leasingcompanies to issue debt and try registration system management, supportfinancial leasing company to carry out cross-border Renminbi financing business,encourage commercial banks to use foreign exchange reserves entrusted loans tosupport cross-border leasing project. Make research on the working of investmentof insurance funds in finance leases. Support the establishment of financialleasing industry fund.

Fourth, improve public services. Gradually establish aunified, standardized and comprehensive statistical system and evaluation indexsystem for financial leasing industry, establish financial leasing industrystandardization system, study and formulate industry climate index.

Fifth, strengthen team building. Support qualified colleges anduniversities to set up financial leasing related majors. Support industryassociations to carry out training, compilation of teaching materials, professionallevel examination and certification, experience promotion, business exchangesand so on.