Breaking down barrier

While companies from other sectors have rushed to get established in China, the cross border leasing industry appears unimpressed by the country's economic potential. With the notable exception of straightforward finance leases to fund aircraft deliveries, the market is a void for most other le...

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Bibliographic Details
Published in:Asset Finance International 2001-09 (286), p.20
Main Author: Jones, Dominic
Format: Article
Language:English
Subjects:
Accounting
Aircraft
Airlines
Cross border transactions
Debt restructuring
Financing leases
International lending
Investors
Leasing
Lessees
Lessors
Liability
Market potential
Operating leases
Present value
Regulatory reform
Tax exemptions
Withholding taxes
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Summary:While companies from other sectors have rushed to get established in China, the cross border leasing industry appears unimpressed by the country's economic potential. With the notable exception of straightforward finance leases to fund aircraft deliveries, the market is a void for most other lease arrangers too. However, a combination of accounting and regulatory reforms plus rapid economic development are improving the outlook for the leasing sector in what now Asia's second largest economy. Only a handful of tax driven lease deals have closed over the last two years for mainland Chinese lessees. One of the last tax driven leases for aircraft assets was a Japanese Leveraged Lease (JLL) arranged by Babcock & Brown for China Northern Airlines in 1999. There are several key reasons for the low lease volumes: firstly, in the wake of the Guangdong International Trust & Investment Corporation (GITIC) affair and the Asian financial crisis, international financials markets have still to recover confidence in Chinese finance deals.
ISSN:1367-8086