By Tian Hui, Research Institute of Finance of DRC

Research Report No 83, 2015 (Total 4768)

Abstract:

Supervision plays an essential role in the development of China's financial leasing industry. At present, departmental supervision is executed in China. Financial leasing companies are divided into organizations of different natures according to the subjects of supervision, with huge differences in terms of supervision methods and rules. Moreover, the development pattern of the whole market is closely related to the characteristics of supervision. Compared to the international practice, there are two kinds of supervision models in China relating to financial leasing industry, which is a little rigid and complicated on the whole. The unique supervision framework is reasonable to some extent, whereas the disadvantages outweigh the advantages, which counts against the development of the industry in the long run. The key reason here does not lie in the departmental supervision itself, rather in the different supervision rules for the same practice in nature, thus leading to diversified rules with respect to law and taxation as well as unfair management and competition environment. Hence the adjustment of supervision framework should be headed in two directions. The first is to unify the supervision and policy and law rules, and the second is to establish a multilayer supervision system with clear division of labor and each performing its own functions.