Chinese Leasing Industry Catching Up to Europe and the U.S.
2018-11-22 11:04 Thursday
A number of leasing companies have opted to set up shop in China since the government opened up the leasing sector in 2007, allowing Chinese banks to conduct financial leasing businesse. Due to favorable government policies, the Chinese leasing industry has grown from an alternative to a prime source of financing, and is expected to rival the European and US financial markets in the near future.
Under the Belt and Road Initiative, Chinese leasing companies definitely have the priority in undertaking major infrastructure projects along strategic corridors in Central Asia, Southeast Asia, the Middle East, and Africa.
China's ship leasing now accounts for over 10% of total global ship finance, and projections suggest Chinese ship leasing will continue to grow in size and influence. Many leasing companies are trying to expand their business by getting public or international cooperation.
China State Shipbuilding Corporation recently applied for an IPO on the Hong Kong Stock Exchange. The company was established in 2012, and was the first ship-owning unit established by a Chinese shipyard. The company mainly provides ship leasing and chartering services, but plans to acquire upstream and downstream assets to diversify its business profile.
The company currently owns a fleet of 60 vessels, made up of 27 bulkers, 14 tankers, 9 container ships, 5 gas carriers and 5 special purpose vessels. 46 vessels in the company's fleet are under financial leasing arrangements and another 14 are on charters.
Nasdaq-listed Capital Maritime & Trading Corp revealed that it is finalizing the paperwork to complete "a more than $200m transaction" with two Chinese leasing companies to fund four projects. Jerry Kalogiratos, a senior executive at Capital, divulged that the deal is with China Merchants Bank (CMB) and the Industrial and Commercial Bank of China (ICBC).
Stamatis Tsantanis, Chairman and CEO of Seanergy Maritime Holdings, whose company recently is cooperating with AVIC, holds that Chinese financiers and European banks will be competing on equal terms in just five to six years.
"The Chinese put their foot on the accelerator when asset values were low so it was a good time to enter the market and once a relationship is established a deal can be done quite quickly," said Tsantanis.