As seen from the current economic development in China, it is the right time to develop the leasing industry in full swing.It is an excellent situation of development in the national economy in China to lay down a macroeconomic foundation for leasing industry growth. In 2001, the national economy in China maintained its sound tendency for development. GDP reached 9593.3 m yuan, an increase of 7.3% over the preceding year. As compared with the apparent slowing tendency of the world’s economy, the economy in China presents quite a high level of stable growth. In 2002, the economy in China maintained such stable growth, and GDP for the first half of the year reached 4553.58b yuan, an increase of 7.8% over the preceding year. GDP for this year will exceed 10000b yuan, an increase of over 8% as compared with the preceding year. The sound development tendency for domestic macro economy provides a vast market for growth of the leasing industry in China. China’s entry into the buyer’s market creates material conditions for starting the leasing market Uprising, growth and prosperity of the leasing industry has always been linked with the developed economy of commodities and abundance of material propitious. Only when the buyer’s market appeases, there will be abundant commodities for leasing or business promoted by leasing. At the present stage, the buyer’s market is formed in China, characterized largely through the total supply of a “relatively excessive” amount exceeding the actual demand by a big margin, thus leading to large stockpiles of commodities and large quantities of idle production equipment. By the end of 1996, the stockpile of commodities in industrial enterprises above the town level totaled 1327.6 b yuan, which would exceed 3000b yuan if the stock of nationwide commercial enterprises and township enterprises was included, whereby the stock of building materials reached 21.8b yuan . That is a dynamically rising figure, as idle equipment and material stock have increased by a large margin with intensified reforms in the enterprises and their shutting down, suspension, amalgamation and switching. All this lays down a material basis for the leasing industry.
Development of leasing consumption is a reflection of improvement of living quality of contemporary people. In the economical time of “shortage”, people stuck to the doctrine of simplicity and saving, running all day after a decent life, and they could not think of leasing consumption. Only when materiel properties are available in abundance after a decent life is ensured basically, can it be possible to develop the leasing industry. Nowadays, the commodity economy grows rapidly, material property is in abundance, and living standards have been substantially improved in China. In 2001, distributable income for urban residents in China increased by 8.5%, farmers’ net income per capita had actual growth of 4.2%, distributable monthly income per capita for urban residents increased 17.3% over the preceding year, and farmers’ income in case went up by 5.9% as compared with the preceding year. The residents in China, shifting from consumption of adequate food and clothing to consumption of a better-off life, are gradually accepting the concept of consumption through leasing.Against the favorable economic environment, the legal environment in today’s China needs to be improved. There are no corresponding laws in effect with respect to substantive leasing. Some simple regulations are found only in the “Law of economic contracts”, “General prescriptions of civil law” as well as related documents promulgated by the Ministry of Finance, and they cannot adapt to the requirement of the leasing industry, so legitimate rights and interests of the parties to the leasing contracts are not under due protection.In 1996, the former Ministry of Domestic Trade issued the “Notification regarding promulgation of regulations on experimental work for physical leasing business” and the “Notification regarding experimental work on physical leasing business” (refer to Appendixes 1, 2 and 3). Following such issuance, composite leasing markets were opened on a trial base in Quxi, Jinan, Beijing, Shenyang and Hangzhou, which was the start of the state’s stress on physical leasing and its legislation. As indicated by responsible personnel in charge of the building machine society subordinate to Shanghai Municipal Commission of Construction, related legislation is now in process and is expected to come into being soon. That indicates that the status of incomplete laws with respect to physical leasing will gradually be improved in China.