ABN AMRO has launched its asset-based finance business in China to provide comprehensive financial leasing products, meeting the fast growing funding needs of clients for capital expenditure and expansion plans.


A comprehensive range of asset-based finance products will be offered to clients such as financial leases, operating leases, sale and leaseback and receivables purchase, will be offered through ABN AMRO’s newly established leasing entity, ABN AMRO Leasing (China) Co.


ABN is among the first international banks to establish a companion leasing company in China.


Demand for its products will mainly be concentrated on leasing of capital goods such as mining equipment, pharmaceutical equipment, manufacturing plants, electricity generators, port handling equipment and road making equipment.


ZZ Qiu, ABN AMRO’s chairman in China and chairman of ABN AMRO Leasing (China) says: “Leasing as an alternative financing tool for capital equipment was introduced to China in 1981, but still plays a very limited role today in comparison to leasing in the Western world. This is largely because companies are still generally unfamiliar with leasing and the benefits of the product.


“However, China’s rapidly growing demand for capital equipment and the gaining sophistication of its financial market will offer tremendous potential for both lessors and lessees.”


The latest available data indicates that the potential upside in the Chinese leasing market is enormous. According to the World Leasing Yearbook, China’s annual leasing volume was only US$2.4bn in 2004, compared to US$220bn annual volume of leasing written in the US, and US$74bn in Japan.


In addition, according to the National Bureau of Statistics “latest statistics, the penetration rate of China’s leasing market is only about 2%, far less than the world’s average level of 17%.


John Rutkowski, head of asset-based finance for Asia, adds: “Given the reforms to the leasing regulatory framework currently being contemplated and expected to be implemented during the course of 2007, we believe leasing finance will become a more viable alternative for both Chinese and international companies seeking funding for the financing of their plant, equipment and expansion requirements.”.