Research On The Finacial Problems Of Chinese Financial Leasing Companies

Financial leasing was born in the United States, and in the1950s. In developed countries, it had become a very important financing tool of the enterprises, and its transaction scale was only lower than the bank credit. Concerned data show that more than two-thirds purchases of equipment were obtained through financial leasing, in the whole world. Although our country had introduced the financial leasing early in1980s, due to various reasons, the way of its development, in China, was very rough. The four pillars of its development had been basically perfect until2006, and it gradually showed a rapid development trend. The statistical data show that the compound annual growth rate of Chinese financial leasing’s transactions scale reached158.87percent, from2006to2011. Significantly exceeded the speed of the developed countries1and Chinese other industries’. However, from the view of penetration of financial leasing and the proportion to GDP, compared with the developed countries, the development of Chinese financial leasing still lagged behind. Whether from the view of sufficiently playing all kinds of unique advantages of financial leasing, to support the upgrading of equipments, transforming of technologies, adjusting industrial structure of Chinese enterprises, from the view of regulating the development of financial leasing, making its obtain sustained, healthy development, to strengthen the research on the financial leasing possesses extremely important and realistic significances. From the analysis of financial leasing;s business supplies and demands, we can find that the potential demands of Chinese economic society to financial leasing are very huge, so this requires us to carry out more researches on it from the view of its supplies. To research the business supplies of financial leasing, this needs us to strengthen the researches on Chinese financial leasing companies(CFLC). From various kinds of factors that influenced the growth and development of CFLC, these factors included legals, accounting standards, regulations, taxation, development of business, source of funds, controlling of risk. professionals, etc. After our comprehensive analysis to the above factors, we find that the financing difficulties are the most outstanding issue which impeded the sustained, healthy development of CFLC. To solve the financing difficulties, it requires us to further research on the current financing situations, the various potential financing channels of CFLC, and probe out some feasible ways of financing, then help CFLC build a diversified financing channels. This paper found that, the bank loans were the most traditional and uppermost financing way of CFLC, but this way was easily influenced by the government’s macro-control policies. While factoring financing, securitization financing, trust financing and foreign debt financing are the most realistic and possible financing channels. Therefore, the author focused on the study of the above four aspects in this paper.This paper aimed to help CFLC construct diversified financing channels, alleviate the current situations of the financing difficulties. By deeply research on the basic theories, relevant laws and regulations, the industry practices, the operating modes and so on of the factoring financing, securitization financing, trust financing and foreign debt financing, this paper found out the existing problems and corresponding countermeasures, and propounded some operable solutions. The author hoped that this paper could arouse the high attention on the CFLC’s financing problems in the academic circles, and could play an important guiding role.This paper was structured as follows:The first part was the introduction. From the macroscopic view to the microcosmic view, this part successively analyzed the industry of Chinese financial leasing, CFLC, the financing problems of CFLC’s, the necessities and realistic significances of CFLC’s implementation of the factoring financing, securitization financing, trust financing and foreign debt financing, and briefly reviewed the related literatures of the domestic and foreign scholars’, introduced the research thoughts and methods of this paper, then pointed out the innovations and deficiencies of this paper.The second part mainly introduced the basic theories of financial leasing and its development general situations. The concrete contents included:the definitions, advantages, business models, profit models of the financial leasing, the development process and current situations in the domestic and foreign areas, the present situations and reasons of CFLC’s financing difficulties, etc. This part aimed to provide theoretical support for the follow-up studies, help the theoretical and academic circles to better understand CFLC’s financing difficulties.The third part mainly studied CFLC’s factoring financing. Introduced the definitions, types and its significances to the commercial banks, financial leasing companies, lessees, suppliers, etc. Sorted out the relevant laws and regulations at present. Analyzed the basic elements of factoring financing and the relevant provisions of some Chinese commercial banks. Pointed out the existing problems and solutions in CFLC’s factoring financing. Presented several modes of factoring financing, which CFLC should adopt. Finally, analyzed the the major participants’ risks and-avoiding measures, in CFLC’s factoring financing.The fourth part mainly studied CFLC’s securitization financing. Introduced the definitions, the basic transaction structures, operating mechanisms, and so on the significances to CFLC of the leasing asset-backed securitization financing. Summarized the explorations and pilots of Chinese asset-backed securitization(ABS), the explorations and practices of Chinese leasing asset-backed securitization(LBS). Analyzed several industry cases, and the favorable conditions and unfavorable conditions of Chinese LBS. Presented two modes of securitization financing, which CFLC should adopt, the first mode was the enterprises’asset securitization, the second mode was the offshore asset securitization, then elaborated the transaction structures, key links, advantages and disadvantages and so on of the above two modes. Finally, analyzed the the major participants’risks and avoiding measures, in CFLC’s securitization financing.The fifth part mainly studied CFLC’s trust financing. Introduced the definitions, the basic transaction structures, the necessities and the feasibilities of CFLC’s trust financing. Summarized the present situations of Chinese trust companies’directly financial leasing business, and the present situations of Chinese trust companies’directly financing services to CFLC. Analyzed the basic reasons which could be used to interpret the phenomenon that is CFLC’s trust financing scale was very limited. Presented two modes of trust financing, which CFLC could adopt. In the first mode, after independently issuing trust products, a trust company directly provided funds to CFLC. In the second mode, after issuing trust products by the commercial banks, a trust company directly provided funds to CFLC. Then, deeply elaborated the transaction structures, key links, advantages and disadvantages and so on of the above two modes. Finally, analyzed the the major participants’risks and avoiding measures, in CFLC’s trust financing.The sixth part mainly studied CFLC’s foreign debt financing. Introduced the definitions, the basic transaction structures, and the realistic significances of CFLC’s foreign debt financing, etc. Summarized the policies and regulations which Chinese relevant departments forced on CFLC about the financing subject, currency type, exchange settlement, foreign guarantee, etc. Analyzed the existing problems from the macro and micro view, when CFLC earred out foreign debt financing. According to the three kinds of CFLC, respectively presented one foreign debt financing mode which CFLC could adopt. In terms of the domestic (pilot) CFLC, they could obtain the qualification for foreign debt financing, by changing themselves into foreign investment enterprises. In terms of the CFLC which supervised by CBRC, they could indirectly obtain foreign debt financing, by means of the foreign investment enterprises which were associated with itself. In terms of the CFLC which belonged to foreign investment enterprises, they could adopt the mode of foreign shareholders’loans. Then, deeply elaborated the transaction structures, key links, advantages and disadvantages and so on of these modes. Finally, analyzed CFLC’s risks and avoiding measures, in CFLC’s foreign debt financing.The seventh part was the conclusion and prospect. Summarized the research conclusions of this paper, and then pointed out the directions and fields of the author’s subsequent studies in the future.The innovations of this paper were:Firstly, based on the existing literatures, this paper introduced and sorted out the basic theories, development process, development status, etc. Pointed out the most important problem during CFLC’s sustainable, healthy development, that is its fund source. Then deeply analyzed the present status of CFLC’s financing difficulties, found out the basic reasons, which were decided by our country’s special conditions, both related to the development process, industry regulation of Chinese financial leasing, and closely related to the subjective reasons, that is. CFLC’s degree of internationalization is lower, and CFLC were lack of compound talents. Secondly, by deeply studied the factoring financing, securitization financing, trust financing and foreign debt financing of CFLC, this paper systematically expounded the related theories, analyzed the operating cases, revealed the existing problems of Chinese current policies and the rooms for improvement, then presented some operable solutions which were different from the existing literatures. Finally, Analyzed the the major participants’risks and avoiding measures, in above four finacing tools. These could bring important practical significances for CFLC to construct diversified financing channels.Thirdly, this paper was closely combined with industry practices. To study CFLC’s financing difficulties, our researches must be closely combined with industry practices, it has been possible to probe out the financing solutions which had the operabilities and could be accepted by the leasing industry. Due to the actual work, the author fortunately began to study financial leasing in2009, both had participated in various exchanging activities which held by the leasing industry committee of CAEFI’s, had in-depth communicated with a number of CFLC’s executives and industry experts, and had successively participated in two CFLC’s set-up work. During the writing process of this paper, the author had carried on the related discussion with the industry experts, and visited a number of related departments of the government, in order to closely combine the theories with the practices.Lastly, this paper was closely combined with Chinese current relevant laws and regulations. Chinese many existing literatures were completed a few years ago, some even were completed from1980s to1990s. But to today, some laws and regulations had been revised many times, some even had been completely failure. Therefore, this paper had comprehensively sorted out Chinese existing laws and regulations, pointed out the exiting problems and the rooms for improvement, in order to closely combine the theories with the policies.