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　　 　　 On December 29, the State Council (China’s cabinet) published the “Catalogue for the Guidance of Foreign-invested Industries (2011 Amended Version)”, changing the item of limiting foreign investment in the financial leasing companies to the one allowing them to do so.
　　The new version of Catalogue was to take effect as of January 30, 2012. By then the “Catalogue for the Guidance of Foreign-invested Industries (2007 Amended Version)”, which was issued in 2007, would become invalid.
　　Experts think that this change could promote the development of China’s financial leasing and expand the channels of raising capital. But it will have limited influence over the current financial leasing industry in China.
　　 More Channels to Get Capital
　　The new version of Catalogue was published by the National Development and Reform Commission and the Ministry of Commerce. Nine new items were added to encourage the development of services in addition to the aforementioned change.
　　The “Methods of Managing Financial Leasing Companies”, which was carried out in 2007, listed the main investors of financial leasing companies, from which the foreign companies were not apparently excluded.
　　This time the foreign companies got the permission to invest in the financial leasing companies, which meant that the threshold was lowered again.
　　“The permission for foreign companies’ entry can promote the development of China’s financial leasing and is good for the overall economic development of China,” said Zhou Wei, president of Minsheng Financial Leasing Co., Ltd.
　　“When foreign investors initially invest in China’s financial leasing industry, they are more likely to choose the pattern of joint venture,” a securities analyst said. He thought that the admittance of foreign capital could help Chinese financial leasing companies to solve the problem of limited financing channels.
　　The financial leasing industry needs a large amount of outside capital. Presently, the financial leasing companies in China mainly raise their capital from their self-owned funds, investment increase of shareholders and banking loans. Limited by the regulation policies and financial market development level, these companies lack multiple and stable capital sources, which is the main factor of hindering the development of this industry.
　　 Limited Influence over Current Business
　　“Only allowing the entry will not have big influence over the business. The market has been seized. Clients and technologies matter in the financial leasing industry,” an analyst said. “The leasing is somewhat like lending loans where the clients are very important.”
　　Presently, the bank-related or supported financial leasing companies have already taken the leading place in the industry. Different leasing markets vary in market development level and management system. So do the financial leasing institutions from different countries in their types and component ratios.
　　“This is attributed to the network resources of the banks that the bank- related or supported financial leasing companies rely on. They have vast credit information of clients and companies.”
　　The bank-related or supported financial leasing companies target big clients and conduct business with big volumes. In addition, they also function as the capital wholesale window and debt platform. And their advantages in capital are unshakable as well. The commercial banks can benefit from the low financing cost brought by the financial leasing companies. Therefore financial leasing companies funded by the banks are in the leading places of the leasing industry with massive assets and fast development. In Europe, the bank-related and supported financial leasing companies take 60%-80% of the business volume in the market.
　　According to a research report of the Sinolink Securities, by now there have been over 200 financial leasing companies in China, of which 24 are funded by banks, 49 funded by nonfinancial institutions and 145 funded by independent third parties. The bankfunded companies do not have advantages in the quantity.
　　However, judged by the market share (in trade volume), the bankfunded financial companies take 60% of the domestic financial leasing industry in China. In addition, they maintain a high growth rate in their assets and profits. From 2007 to 2010, the bankfunded financial leasing companies in China saw the annual compound growth rates of assets and profits were respectively 135% and 165%. In comparison, the growth rate for nonfinancial-institution-funded companies is 75% and 67%, and 44% and 48% for the companies funded by independent third parties.

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