As an interdisciplinary sector integrating finance, trade and services, financial leasing is widely used in transactions involving aircraft, ships, automobiles, construction machinery, production equipment, photovoltaic power generation, wind power, hydropower and other equipment and facilities. With the dual characteristics of funding and property financing, financial leasing is a natural fit with the real economy. It is an important financial tool for serving both national strategies and the actual economy, and in recent years, has played an increasingly prominent role in equipment manufacturing, green and low-carbon development and electronic information.

As a state-owned financial enterprise, and as one of the earliest specialized financial leasing companies in China, JIC will always serve the real economy, gearing itself towards national strategies and focused on leasing. Vigorous support has been provided to equipment manufacturing, green and low-carbon development, and electronic information, thanks to the company’s firm commitment to promoting technological progress and industrial upgrading.

Supporting the Upgrading of Equipment Manufacturing

The manufacturing industry is a key part of the national economy. It is the foundation of building a country, the most important tool for its rejuvenation, and the basis of its renewed strength. Since the beginning of industrial civilization in the middle of the 18thcentury, the rise and fall of world powers and the struggle of the Chinese nation have repeatedly proved that without a strong manufacturing industry, there can be no strong or prosperous nation. Financial leasing can make the most of the unique advantages of supporting large-scale equipment transactions, revitalizing the stock assets of enterprises and providing support for companies to purchase or upgrade new equipment. Especially at the key moment of this historic intersection of a new scientific revolution and industrial reform with the accelerated transformation of China’s economic development model, financial leasing can greatly improve social and economic efficiency, manifesting its obvious importance.

As pointed out in the section “Deepening reform in the financial sector, expanding financing channels for the manufacturing sector, and reducing financing costs” in The Made in China 2025 Initiative, support will be given to large manufacturing enterprise groups in key areas to carry out pilot programs that combine industry with finance and promote the transformation and upgrading of the manufacturing sector through financial leasing.

The Report to the 20thNational Congress of the Communist Party of China pointed out that the country should focus on the real economy, advance new industrialization, and accelerate the creation of a strong country in terms of manufacturing, quality, aerospace, transportation, Internet and digitalization. Projects should be launched to rebuild the industrial base and tackle key technical and equipment issues, support the development of Specialized, Fined, Peculiar and Innovative enterprises, and promote high-end, intelligent, and green manufacturing.

A series of policies have also pointed the direction for the development of the financial leasing industry. The industry is embracing a new round of historical opportunities, and also accepting the new requirements being put forward. As part of this new historical trend, only the most highly motivated and strongest institutions can dance with the times.

With the increasing importance of energy security, oil drilling equipment manufacturing has begun to come into its own. In recent years, many major domestic oil producers have stepped up their upstream exploration and development efforts to fulfill their key responsibility of increasing reserves and production.

JIC Leasing has worked with a leading oil rig design and manufacturing enterprise subordinated to China National Petroleum Corporation. This enterprise primarily designs and manufactures conventional land rigs, polar rigs and complete sets of marine rigs, ranging from 1000 to 12000 meters in-depth and featuring our driving forms. They also produce offshore drilling platforms, along with various series of 500HP to 3,000HP drilling pumps, well control and wellhead equipment, special vehicles, steel pipes and steel ropes, large diameter roller drill bits and other drilling equipment supporting products. Affected by the current financial environment, the increased production demands on this enterprise is not proportional to the capital expenditure support it can obtain, requiring a new business model to solve these new demands.

With the help of financial leasing from JIC Leasing, the contradiction between supply guarantee and financial pressure can be eased, helping to resolve the company’s liquidity and sales issues.

Increased Green and Low-carbon Development

At present, the construction of ecological civilization in China has entered a critical period. Carbon reduction is the new key strategic direction, along with promoting synergy in pollution reduction and carbon reduction, driving the green transformation of economic and social development, and realizing the improvement of ecological quality from quantitative to qualitative change.

Industry experts point out that Carbon Peak and Carbon Neutrality require an extremely high amount of capital. According to calculations made by research institutions, the average annual investment demand lies between RMB 3 trillion and RMB 5 trillion, with a significant annual funding gap of around RMB 1.6 trillion.

As an important way for finance to serve the real economy, financial leasing has the feature of providing long-term financing support, demonstrating natural advantages in terms of green and low-carbon development, especially in cooperation with new energy. Specifically, financial leasing can work in the following aspects:

In-depth study of all links within the clean energy industry chain, including photovoltaic, wind power and garbage power generation, actively participating in the clean energy sector under the premise of balancing income and risk, tapping potential business opportunities, and gradually forming standardized green leasing products.

Steadily exploring project opportunities for manufacturing enterprises, and preferentially cooperating with leading enterprises with mature technology and obvious industry barriers within the manufacturing industry chain.

Exploring green and low-carbon technology research and development and application projects in relation to energy conservation and carbon reduction within the steel, nonferrous metals, petrochemical, chemical and building materials industries. The use of energy-saving building materials reflects the concept of a circular economy, water source protection, sewage treatment, garbage classification and other environmental governance operations.

Taking China’s photovoltaic manufacturing as an example, this industry has grown strongly in recent years. As shown by the data released by the 2022 Annual Conference of the China PV Industry, in the first three quarters of 2022, the output of polycrystalline silicon totaled 550,000 tons, up 52.8% year on year; the output of silicon wafers amounted to 236 GW, up 43% year on year; the output of solar cells reached 209 GW, up 42.2% year on year; and the output of components was 191 GW, up 46.9% year on year.

With the rapid development of the industry, the contradiction between the rising installed capacity and the funding gap has become increasingly prominent, further promoting the application of financial leasing within the photovoltaic industry.

As of the first half of this year, cumulative global shipments of photovoltaic modules for a leading photovoltaic module company exceeded 100GW, meaning that at least one in every 10 solar modules installed in the world was produced by this company. With the expansion of production capacity, an increasingly prominent internal demand for funding has emerged.

In response to these problems, JIC Leasing provided financial leasing services to the company’s production base in Chuxiong, in order to support its high-efficiency battery cell production, thereby consolidating its position as a leader in the photovoltaic module industry.

With the support of this financial leasing, PV cell shipments will be further expanded. Each additional 100GW of production capacity means that about 130 billion KWH of clean energy electricity can be produced, reducing carbon dioxide emissions by 130 million tons and saving over 50 million tons of standard coal; this is equivalent to planting more than 7 billion trees.

Speeding up Efforts to Fill the Gaps

In the midst of the complex international situation in recent years, the issue of supply chain security within the Chinese information industry has become increasingly prominent, while the industry chain supporting microchip manufacturing has attracted extensive attention.

Chip research and development is an example of complex system engineering. To achieve full autonomy and controllability, independently developed CPUs, a software ecology based on an independent instruction system, and production engineering based on independent materials and equipment are indispensable. Key and core technologies are vital to the country. In recent years, China has constantly stressed the urgency of mastering core technologies in high-end chip manufacturing and other fields, so as to speed up efforts to fill the gap and improve the country’s capacity to guarantee the supply of strategic resources.

With core equipment for Piezoelectric Micro-electromechanical System (MEMS) processing lines, such as lithography machines and etching machines, being used as leased property, JIC Leasing has provided liquidity support to a chip processing and manufacturing enterprise to ensure the orderly release of production capacity. To date, the enterprise has built up part of its wafer production capacity, and gradually promoted the trial production of wafers.

Serving National Emergency Support

Helicopter air rescue is one of the quickest means of emergency rescue response, offering the fastest access to disaster sites and the maximum expansion of rescue space. With the advancement of the establishment of aviation emergency rescue systems in China, the number of aircraft such as helicopters and fixed-wing airplanes used for emergency rescue continues to increase. For emergency rescue tasks resulting from geological disasters and forest fires, aviation emergency rescue plays an important role due to its fast response, good maneuverability, wide rescue range, and advanced technology.

Taking the Mi-171 helicopter as an example, this model boasts excellent performance in terms of high lift and high load at low altitudes, enabling it to fetch water with buckets and accurately put out fires. The Mi-171 has demonstrated excellent performances in various emergency rescue tasks following fires and earthquakes. JIC Leasing has worked with China General Airlines to introduce two of these helicopters from the overseas market and lease them under an operating lease agreement for the command and dispatch of the Ministry of Emergency Management. These two helicopters have played an important role in forest fire fighting and earthquake rescue missions in Sichuan, Tibet and other places.

Against the background of China’s economy gradually recovering from the epidemic, and with new economic development focusing on the effective improvement of quality and reasonable growth of quantity, the upgrading and transformation of traditional industries, vigorous development of emerging industries, and the modernization of public services provide good opportunities for the development of China’s financial leasing industry. As an important link combining industry and finance, financial leasing has also been endowed with more responsibilities and new missions. It can be predicted that, on this new journey of building China’s path to modernization, the financial leasing industry will have a lot to offer.