Navigating China's financial leasing industry's evolving landscape

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China's economic transformation and advancements are reshaping the financial landscape, with the financial leasing industry standing at a critical juncture. As regulatory scrutiny and market competition both intensify, the industry is compelled to re-evaluate its core function and adapt to a changing environment. In this interview with, Xiong Xiangen, chairman of Jiangsu Financial Leasing Co., Ltd. (hereinafter referred to as Jiangsu Financial Leasing) and a pioneer in the industry, shares his insights on the company's journey and the future of financial leasing within China.

Jiangsu Financial Leasing Co., Ltd. [Photo provided to]

Xiong, a veteran with over 20 years of experience, traced the industry's roots back to the early 1980s, with the establishment of the first financial leasing companies. Over the past four decades, the industry has undergone four distinct stages: startup, rectification, rapid development and, currently, accelerated transformation. 

Emerging from the Jiangsu Agency Department of China Leasing Co., Ltd, Jiangsu Financial Leasing has navigated these changes successfully, adapting and growing alongside the industry.

Xiong acknowledged the challenges faced by the company as a state-owned enterprise entering a fiercely competitive market and recalled the strategic transformation the company has gone through since he was appointed as the company head during its 2002 reorganization. 

According to Xiong, the company's transformation encompassed three key pillars: Firstly, reform of three systems. the company revitalized its internal structure by focusing on labor, personnel and distribution systems. Then, between 2009 and 2014, the company implemented mixed-ownership reform. Commercial banks and foreign shareholders brought forward-thinking experience and rich resources to the company, which has greatly accelerated the pace of development. Finally, in 2018, followed by the employment of equity incentives in 2020, the company became the first of its kind to list on the A-share market.

With a diversified ownership structure and a focus on high-level governance, today, Jiangsu Financial Leasing has established itself as a leader in the industry. It boasts a differentiated business model, serving a vast clientele and managing billions of yuan in assets. 

China's financial leasing industry is undergoing continuous regulatory refinement. A series of regulatory policies for the financial leasing industry have been rolled out since 2023. The Administrative Measures for Financial Leasing Companies (draft for comments), issued by the National Administration of Financial Regulation early this year, was the first major revision in a decade. The draft requests that financial leasing companies return to the main business of leasing, raises the standards for market entry and accentuates the prevention and control of risks.

Xiong, who also serves as the deputy director of the Financial Leasing Committee of the China Banking Association, acknowledged the importance of these regulations in guiding the industry's growth and promoting responsible practices. The company has already begun aligning its development strategy, actively serving sectors like clean energy, transportation and agriculture. It also prioritizes responsible practices through robust risk management measures tailored to small and micro businesses.

With the rapid development of technologies such as big data, cloud computing, IoT, block-chain and artificial intelligence, the world's digital economy is accelerating into a new stage which has caused profound changes within the ecology of the financial leasing industry. In recent years, Jiangsu Financial Leasing has continued to build its competitiveness through technological means. 

Xiong summarized the company's improvement in information technology as a "three-step strategy" of supporting, integrating and leading. This strategy is a cornerstone of its "retail + technology" dual-leading approach, outlined in the company's 2022-2026 five-year plan. Jiangsu Financial Leasing's technological focus encompasses several key areas:

First, online service. The company offers a suite of online financial services through platforms like "Su Hi Lease" and "Micro Hi Lease," creating a seamless online experience for customers.

Second, intelligent decision-making. The company harnesses the power of big data and AI to optimize operations, improve risk management and enhance customer risk identification.

Third, agile and adaptable systems. The company develops responsive and customizable financial information systems that cater to diverse business scenarios.

Fourth, controllable system security. The company prioritizes information security by building robust security systems and exploring emerging technologies in the financial leasing industry.

By embracing these technological advancements, Jiangsu Financial Leasing aims to improve the efficiency and quality of its financial services, broaden its business scope and solidify its position as a leader in China's evolving financial leasing landscape.

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