(Yicai Global) May 7 -- Shanghai's business district of Lujiazui will promote the development of its financial leasing sector in order to expand its influence in the world's second-largest financial leasing market.
Lujiazui will guide local state-owned enterprises and social capital to set up a financial leasing fund and encourage China's top businesses in the sector to move their headquarters to the area, Zhang Yuxiang, director general of Lujiazui's admin bureau of the Shanghai Free-Trade Zone, told Yicai Global at a forum held in Lujiazui.
Financial leasing involves a company buying an asset and renting it out to another firm. Shanghai has almost 2,000 such companies, or 20 percent of the nation's total, and those manage nearly one-third of leased assets nationwide, including those in aviation, shipping and construction machinery.
Lujiazui is home to nearly 200 of the city's financial leasing firms. They have combined assets of almost CNY1 trillion (USD147.8 billion), with five of them managing over CNY100 billion (USD14.8 billion). Between them they paid about CNY6.3 billion in taxes last year, which was roughly half of what the city's entire financial leasing sector contributed.
Lujiazui will also promote the equity-capital market of the Shanghai United Assets and Equity Exchange to build a trading platform and provide registration and circulation services for the sector, Zhang added.
China has become the world's No. 2 leasing market after almost 40 years of development in the field, according to Zhao Wanbing, deputy director general at Shanghai's financial regulation bureau. But according to Zhang Xinyuan, vice president at the Bank of China's Shanghai branch, the penetration rate is less than 8 percent, indicating huge opportunities.
Editors: Summer Xia, Emmi Laine