On Regulatory And Legislative Proposals For China’s Finance Lease

The human social contradiction is basically composed of that between productiveforces and production relations on the one hand and that between the economic baseand the superstructure on the other, both of which exist in all social formations andhave been a leading thread throughout each social formation. Historical materialism,from macroscopical to microcosmic angles, applies to the formation of every industryas well. In financial leasing industry, government regulation belongs to the scope ofsuperstructure which is determined by economic base—the development of financeleases and, simultaneously, government regulation also reacts up on the developmentof finance leases. Unless playing a role as accommodator, government regulation willotherwise become the obstacle to the development of the finance lease, and this is thebasic principle. Based on the review of the development history of China’s financialleasing industry and the history of its regulatory regime, this paper, combined withChina’s actual conditions, practically makes an in-depth analysis of the existingproblems in the supervision of China’s finance lease with recommendations for itsconsummation proposed by learning from foreign experience in finance leaseregulatory approach, so as to promote the development of China’s financial leasingindustry and make it carry on important affection in boosting China’s economicconstruction.This paper is divided into six chapters which follow the main line below:The introduction part mainly gives a presentation about the topic background. Chapter One is the introduction to finance lease. First, this part gives anintroduction about the generation of finance leases as well as China’s import offinance leases, followed by the multifaceted interpretation of the definition of financeleases for a comprehensive understanding of its connotation; at last, Chapter Onemakes a clarification and analysis of the three common misunderstandings about theconnotation of finance leases, and the three erroneous zones is the confusion betweenfinance lease and rent, the confusion between finance lease and financial lease, andthat between finance lease and operating lease, so as to have a deeper understandingof the connotation of finance lease on the one hand, and lay the foundation to thefollowing exploration of the nature of finance leases on the other hand.Chapter Two and Chapter Three summarize and analyze the development processof China’s financial leasing industry as well as the history of its regulatory regime,aimed at combing the development history of China’s finance lease to pinpoint thehistorical roots of the establishment of the current finance lease regulatory system soas to consummate the regulatory approach in tune with the trend of historicaldevelopment.Chapter Four makes a discussion of and a comparison among several regulatoryapproaches of foreign finance leases. Finance lease is an exotic thing, and successfulregulatory approach in foreign countries can provide reference and guidance for theestablishment and consummation of China’s financial leasing regulatory regime.Chapter Five and Chapter Six are research focuses in the paper. First, based onthe research on the first four chapters, Chapter Five discusses the problems existing inthe China’s financing supervision, including the parrot China plays a role as inlearning from foreign finance lease experience; the unified understanding of thenature of the finance lease and double-track system of supervision; emphasis onexamination and approval as well as less attention paid to supervision; lack ofsupporting measures, laws®ulations and policy guidance; and lack of legalauthority. Then, to solve these problems, Chapter Six offers suggestions on theconsummation of financial leasing regulatory regime by learning from foreignexperience: to establish government-initiating regulatory regime based on China’s actual conditions; to pinpoint the nonmonetary nature of finance leases and establishmoderate financial leasing supervision; to unify regulation in the sector and establishfunctional financial leasing supervision; to stress supervision and pay less attention toexamination and approval while strengthening the supervision of financial leasingcompanies; and to consummate financial leasing legislative system and buildincentive financial leasing supervision with recommendations for the establishment ofcomplete finance lease legal system led by “Financing Lease Law” proposed.