Guiding Opinions of Promoting the Sound Development of the Financial Leasing (Financial Institutions) Sector

 2018-08-27  144


· Document Number:No. 69 [2015] of the General Office of the State Council

· Area of Law: Foreign Economy and Trade

· Level of Authority: Regulatory Documents of the State Council

· Date issued:09-01-2015

· Effective Date:09-01-2015

· Issuing Authority: General Office of the State Council

· Status: Effective

 

Guiding Opinions of the General Office of the State Council on Promoting the Sound Development of the Financial Leasing (Financial Institutions) Sector
(No. 69 [2015] of the General Office of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
Financial leasing provided by financial institutions is an investment and financing method closely connected with the real economy and a positive force to drive industrial innovation and upgrade and promote social investment and adjustment of the economic structure. Over recent years, China's financial leasing (financial institutions) sector has witnessed significant development, its integrated strength has improved tremendously, and the sector's contributions and social value are gradually emerging. However, generally, the pervasive and coverage rates of the financial leasing (financial institutions) sector in national economy are still relatively low, the external environment is not mature enough; and the sector's competitiveness remains to be enhanced. For purposes of further promoting the sound development of the financial leasing (financial institutions) sector, innovating in financing services, supporting industrial upgrade, expanding the financing channels for micro-, small and medium-sized enterprises, and effectively serving the real economy, with the approval of the State Council, the following opinions are hereby offered:
I Accelerating the development of the financial leasing (financial institutions) sector and underscoring its important role in promoting the transformation and upgrade of the national economy
A financial leasing company formed as a financial institution provides financing and property lending services to enterprises and individuals that have certain manufacturing techniques and management experience but insufficient means of production. Equipment leasing may directly reduce the liability-asset ratio of an enterprise, subletting in kind may directly promote transfer of production capacity, enterprise restructuring, and upgrade of means of production, sale and leaseback may directly enhance the use efficiency of capital.
The important role of financial leasing (financial institutions) in serving real economy shall be fully understood, and overall consideration shall be given to financial leasing (financial institutions) in the whole development strategy of the national economy. The development of long-acting mechanisms for the financial leasing (financial institutions) sector shall be accelerated, an external environment favorable to the development of the sector shall be actively created, the mode of development of the sector shall be further transformed, to form a safe, solid, professional, efficient, vigorous, complete, and internationally competitive modern financial leasing (financial institutions) system. The role of financial leasing (financial institutions) as an engine in improving the efficiency of resource allocation, enhancing industrial competitiveness, and promoting adjustment of the structure of the production capacity shall be maximized, to develop it into an effective tool for optimizing resource allocation and promoting economic transformation and upgrade.
II Highlighting the characteristics of financial leasing (financial institutions) and improving company's core competitiveness
The reform of systems and mechanisms shall be deepened, all types of private capital shall be guided in entering the financial leasing (financial institutions) sector, and private capital shall be supported in establishing financial leasing companies (financial institutions) independently assuming risks, to expand the coverage of the services. Financial leasing companies (financial institutions) shall be guided in defining their market orientation, highlighting the characteristic of the combination of financing and property lending, and focusing on certain areas where they have comparative advantages based on their development strategies, enterprise sizes, financial strength, and management abilities, to achieve professional, specialized, and differentiated development. Financial leasing companies (financial institutions) shall be supported in improving their financing services by following the development trend of "Internet plus" and taking advantage of the Internet of Things, cloud computing, big data, and other technologies. A sound corporate governance structure and an adequate and effective internal control system shall be established, and qualified financial leasing companies (financial institutions) shall be propelled to advance the mixed ownership reform in accordance with laws and regulations and optimize incentive and restraint mechanisms, to form an internal governance system featuring clearly defined powers and responsibilities, effective checks and balance, rational incentives, and efficient operation. On the premise of controllable risks, financial leasing companies (financial institutions) shall be encouraged to conduct independent innovations, accelerate the fostering of professional teams, and vigorously develop their core competitiveness.
III Taking advantage of cooperation between industries and the financing sector and supporting optimization and adjustment of the industrial structure
Financial leasing companies (financial institutions) shall be encouraged to play a role in, among others, expanding investment in equipment, supporting technological progress, promoting sales of products, and enhancing the integration of services, innovate in the modes of service cooperation and creation of value, vigorously serve "one belt, one road," coordinated development of Beijing, Tianjin, and Hebei province, Yangtze River economic belt, "made in China 2025," and other major state strategies, and promote entrepreneurship and innovation among all the people. The development of the new-generation information technology, manufacture of high-end equipment, new energy, new materials, energy conservation, environmental protection, biology, and other strategic emerging industries shall be vigorously supported. The support for education, culture, medicine, health, and other areas relating to people's livelihood shall be strengthened. A group of internationally competitive financial leasing companies (financial institutions) in aircraft, ship, engineering machinery, and other traditional fields shall be fostered. The fields of buses, taxis, and vehicles for business use shall be encouraged to develop new-energy automobiles and their supporting facilities through financial leasing (financial institutions). Financial leasing companies (financial institutions) shall be encouraged to take advantage of existing tax policies for domestic comprehensive bonded zones and pilot free trade zones as well as overseas preferential policies to establish specialized subsidiary companies to conduct financial leasing business and improve their professional management capability and services. Financial leasing companies (financial institutions) shall be supported in exploring the international market and provide supporting services to the international cooperation in production capacity and manufacture of equipment. The introduction of advanced foreign equipment through financial leasing (financial institutions) shall be encouraged to raise the level of domestic technical equipment; and meanwhile, the use of home-made equipment shall be particularly supported.
IV Improving financial leasing services and enhancing support for weak links
The establishment of financial leasing companies (financial institutions) oriented to "agriculture, rural areas, and farmers" and micro-, small, and medium-sized enterprises shall be supported. Financial leasing companies (financial institutions) shall be encouraged to, for their advantages such as convenience in financing, flexible time limit, and optimized finance, develop fairly priced products and services fit for the characteristics of "agriculture, rural areas, and farmers," actively conduct pilot programs of financial leasing of large agricultural implements, and support the replacement of large agricultural machinery, production facilities, and processing equipment. The feasibility of using biological assets as leasehold shall be explored. Qualified financial leasing companies (financial institutions) shall be allowed to enjoy interest subsidization and rewards from public finance. Actual users of leased agricultural implements and other equipment shall be allowed to enjoy subsidies for purchasing agricultural implements according to applicable provisions. The support for science and technology, innovative, and startup micro-, small, and medium-sized enterprises shall be strengthened. Financial leasing companies (financial institutions) shall be allowed to use the credit risk compensation funds for micro-, small, and medium-sized enterprises established by local people's governments and participate in the development of the credit system of micro-, small, and medium-sized enterprises. Local people's governments shall be encouraged to direct financial leasing companies (financial institutions) to increase their support for the financing of "agriculture, rural areas, and farmers" and micro-, small, and medium-sized enterprises by reward, risk compensation, and other means. Qualified financial leasing companies (financial institutions) shall be supported in issuing financial bonds for "agriculture, rural areas, and farmers" and micro- and small enterprises. The tolerance of non-performing assets in the financial leasing business relating to micro-, small, and medium-sized enterprises shall be appropriately raised.
V Strengthening infrastructure construction and laying a solid foundation for the development of the sector
Laws and regulations on the financial leasing (financial institutions) sector shall be gradually improved, and a leasehold registration system with legal effect shall be researched and established to allow leasehold to play its role of risk protection to protect the legitimate rights and interests of financial leasing companies (financial institutions). Tax policies for financial leasing shall be implemented to effectively promote the sound development of the sector. The construction of second-hand leasehold circulation markets shall be promoted to expand the channels for the disposal of leaseholds and develop more profit models of financial leasing companies (financial institutions). The support by government procurement shall be enhanced, and the people's governments at all levels shall be encouraged to purchase financial leasing services when providing public services and promoting the construction and operation of infrastructure. Enterprises' technology improvements and equipment purchase through financial leasing shall be included in the applicable scope of encouragement policies.
VI Improving the supporting policy system and enhancing the driving force for sustainable development
Qualified financial leasing companies (financial institutions) shall be allowed to go public and issue preferred shares and subordinated bonds, to provide more channels for financial leasing companies to replenish capital. Qualified financial leasing companies (financial institutions) shall be allowed to raise funds through issuance of bonds, asset securitization and other multiple channels. The investment of insurance funds in assets of financial leasing shall be studied. The management requirements on external debt quotas shall be moderately eased, and the procedures for approving external debt funds shall be simplified. Financial leasing companies (financial institutions) shall be supported in conducting cross-border RMB business, and quota of cross-border RMB financing shall be granted to financial leasing companies (financial institutions). Foreign exchange reserve entrusted loan and other multiple methods shall be positively used to increase support for qualified financial leasing companies. Leasing industry funds in diversified forms shall be established to provide long-term stable sources of funds to financial leasing companies (financial institutions). The transaction and registration management of motor vehicles shall be well-regulated, and the procedures for transaction registration shall be simplified for the convenience of financial leasing companies (financial institutions). The registration system of ships shall be improved to promote the sound development of financial leasing relating to ships.
VII Strengthening self-regulation of the sector and optimizing the environment for the development of the sector
The development of self-regulatory organizations in financial leasing (financial institutions) sector shall be strengthened, and they shall fulfill the functions of coordination, rights protection, self-regulation, and service, establish and improve the self-restraint mechanisms of the sector, actively fulfill their social responsibilities, and maintain a good image of the sector. The publicity and dissemination of financial leasing concepts and knowledge shall be strengthened to improve the recognition of the public and enterprises. Information disclosure shall be improved, and data on the financial leasing (financial institutions) sector shall be released regularly. Cooperation with colleges and universities shall be vigorously conducted to foster professional talents in financial leasing. The financial leasing (financial institutions) sector shall be supported in jointly establishing market-oriented financial leasing registration and circulation platforms to provide services to all types of market participants who take part voluntarily, promote the trading and transfer of assets of financial leasing, make good use of existing assets of financial leasing, and better serve the real economy.
VIII Improving the supervision system and enhancing risk management ability
The risk management of financial leasing companies (financial institutions) shall be strengthened comprehensively, and their ability to dispose of physical assets shall be enhanced. A risk monitoring and warning mechanism shall be established and improved, all types of hidden risks shall be ferreted out in depth, and risk contingency plan shall be improved. The classification of assets and management of provisions shall be improved to enhance their ability to resist risks. The building of the regulatory compliance system shall be strengthened, the awareness of compliance in operations of the financial leasing (financial institutions) sector shall be raised, and a long-acting compliance management mechanism shall be established and improved. The working requirements of simplification of administrative procedures and decentralization of powers, combination of decentralization and control, and optimization of services shall be implemented, the interim and ex-post supervision shall be especially strengthened, the allocation of supervision resources shall be optimized, and the development of the top-level rules of the sector shall be strengthened. Departments concerned shall strengthen coordination and cooperation to prevent the “cross infection” of risks. The risk-based supervision system with capital supervision at its core and fit for the characteristics of the sector shall be improved to, on the premise of controllable risks, promote the sound development of the financial leasing (financial institutions) sector and guard the bottom line of non-occurrence of systemic and regional financial risks.
General Office of the State Council
September 1, 2015