The leasing industry's legal environment improves

The leasing industry in China is becoming a viable avenue for foreign investors, after encountering serious difficulties in the late 1980s and early 1990s. These difficulties stemmed from the industry's inadequate legal framework. Despite a troubled start, by the late 1990s the central government recognized that a vibrant leasing industry could reduce upfront capital expenses, stimulate consumption, and help develop a more comprehensive financial industry in the runup to China's entry into the World Trade Organization (WTO). Renewing its focus on the development of an indigenous leasing industry, particularly financial leasing, the central government has licensed several financial leasing companies since 1999 in Shenzhen, Guangdong Province, and elsewhere. According to officials from the relevant government authorities, the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) has approved 42 equity-joint-venture leasing companies, and the People's Bank of China (PBOC) has approved 15 domestic financial leasing companies.