Finance leasing, also known in China as capital leasing, relates to sectors such as aviation, maritime shipping, machinery, medical equipment and communications, as well as to infrastructure construction. As in the West, equipment is purchased by the lessor and payments are made by the lessee.

"China's financial leasing market is expected to grow at a pace of 50% annually, and the nation's total finance leasing market will exceed 5 trillion yuan in four years to 2017," Yang Haitian, leasing association chairman of the China Chamber of International Commerce, said earlier this month at a forum.

ChinaDaily reports that as of the end of 2013, there were about 1,026 financial leasing companies across the nation, growing at a rate of 83.2% year-on-year, according to a report issued on Wednesday.

Leasing businesses will see great opportunities in coming years, Yang said.

An example of how entrepreneurship is driving Chinese leasing is in the recent case of Chinese auto and battery maker BYD Co Ltd which has announced that it plans to start a brand new financial and operating leasing business, with partners, with a size of business no more than 9 billion yuan ($1.48 billion).

The plan was released in a statement issued by the company's board of directors.

The statement said “as external financing has become increasingly difficult, the move will help ease the company's operational capital pressure and cater to the medium- to long-term capital need”.

 

Giant aircraft leasing order

The report follows news that Gulfstream Aerospace Corp, wholly owned by General Dynamics, has sold 60 aircraft to China's Minsheng Financial Leasing Co in what is one of the biggest single orders for jets in Gulfstream's history.


The aircraft order, signed in Q4 2013, represents firm sales and an option for additional jets, Gulfstream said in a statement without disclosing financial terms. The sale includes a range of aircraft, from the mid-size G280 jet to the ultra-large cabin G650.

Savannah, Georgia-based Gulfstream is competing against Brazil's Embraer SA, Cessna Aircraft Co, and Bombardier Inc to gain a foothold for business jets in the fast-growing China market, which each company sees as a crucial region for future growth.

Minsheng Financial Leasing was established in 2008 by China Minsheng Banking Corp and Tianjin Free Trade Zone Investment Co. The company reports more than 190 billion yuan ($30.6 billion) in assets.