Chinese government pushes leasing abroad

06/03/2012

 

Financial leasing companies such as ICBC Leasing Co Ltd are being encouraged by the Ministry of Commerce to seek opportunities in high-tech industries, to develop the overseas financial leasing market to help domestic manufacturers do more business abroad, according to local press reports.

The ministry said in a statement that financial leasing companies will be encouraged to deepen cooperation with overseas construction companies for equipment leases and “positively participate” in infrastructure construction projects. China was also encouraging insurance companies to go abroad to support the financial leasing industry.

Leasing has a bright future in China, as of the end of 2011 China had more than 260 financial leasing companies with an aggregate contract balance of 700 billion yuan ($110.7 billion). The common process for Chinese machinery companies going abroad is to set up overseas factories and sell their products abroad, and “we are cooperating with them to boost China’s manufacturing market,” said Cong Lin, chief executive officer of ICBC Leasing Co Ltd, one of the largest leasing companies.

Cong was reported in China Daily as saying that ICBC Leasing often bought electrical equipment from Huawei Technologies Co Ltd, and leased these products around the world. This system was a good way for Huawei eventually to sell products and expand overseas. According to Cong, ICBC Leasing also cooperated with Sany Group, leasing their engineering machines to European clients, and solving the financing problems of many Sany clients.

As with other sectors, domestic machinery producers are accelerating their moves abroad. A recent survey found that in the first eight months of 2011, exports of excavators grew 54.7 percent year-on-year, those of loaders were up 76.6 percent and those of bulldozers increased 62.2 percent.

According to the ministry, traditional financial leasing businesses involving aircraft, ships and engineering machines should be further developed. It said that financial leasing companies could also seek opportunities in high-tech industries such as biotechnology, new energy and high-end equipment manufacturing.

The ministry’s statement also said that as China sought to transform its economic development mode during the 12th Five-Year Plan period (2011-2015), the financial leasing industry could play an important role in investment, production and consumption.

 

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