China implements rules to aid the unstable financial leasing sector

09.01.2020 - Petr Mazaylo
China implements rules to aid the unstable financial leasing sector

BEIJING-China recently released drafted guidelines to arm its financial leasing sector that holds 4 trillion yuan worth of assets ($577.16 billion), in its latest scheme to negate financial declines.

China recorded a total of 10,900 leasing company from June 2019 posting and 72% of these are inactive, according to a statement released by China Banking and Insurance Regulatory Commission (CBIRC).

The new draft mandates leasing firms to lessen their property comprised of risky assets and to not overfund a client.

Companies under the leasing sector have drifted from its initial and primary business that includes giving financial and leasing solutions to firms, the CBIRC said.

The sector is in dire need of a prudent and consistent regulatory system that would enforce and usher leasing companies back to their initial business, the CBIRC added.

The regulation authority set a two-year mark to polish the troubled sector.


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