Businesses hoping to expand urged to use financial leasing

BEIJING - China will strive to develop the overseas financial leasing market to help domestic manufacturers do more business abroad, the Ministry of Commerce said on Tuesday.

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.

The statement said that China was also encouraging insurance companies to go abroad to support the financial leasing industry.

Financial leasing companies buy assets chosen by clients, who then lease the items. Clients have the option to own the assets eventually.

As of the end of last year, China had more than 260 financial leasing companies with an aggregate contract balance of 700 billion yuan ($110.7 billion), the ministry said.

According to a survey by China Construction Machinery Business Online, domestic machinery producers are accelerating their moves abroad.

The 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.

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 nation's largest leasing companies.