Business
Last updated at: (Beijing Time) Tuesday, December 30, 2003
Three foreign-funded auto-financing firms approved
China Banking Regulatory Commission (CBRC) approved on December 29 the establishment of three foreign-funded auto financing companies.
China Banking Regulatory Commission (CBRC) announced on December 29 that the proposed establishment of Shanghai GM Automobile Financing Co., Ltd, Toyota Auto Financing (China) Com., Ltd and Volkswagen Auto-Financing (China) Co., Ltd has been approved. The three companies are the first batch of auto financing companies approved by China after it enacted the "Measures for Administration of Auto Financing Companies" and the "Detailed Rules for Implementation of Measures for Administration of Auto Financing Companies." The three foreign automakers filed their applications earlier this month.
Shanghai GM Auto Financing Co. Ltd., a joint venture financing institution is planned to be located in Shanghai. It is co-funded by US General Motors Acceptance Corp. (GMAC), and Shanghai Automotive Group Finance Co., Ltd. Toyota Auto Financing (China) Co., Ltd and Volkswagen Auto Financing Service (China) Co., Ltd are to be established in Beijing. They are the solely foreign-funded ones by Toyota Financing Service Corporation and Volkswagen Financial Service respectively.
A responsible person with CBRC said that during the examination and approval of the establishment of auto financing companies, CBRC will strictly abide by the principle of national treatment treating the foreign-funded and China-funded companies fairly and squarely. The approval of an application depends on whether the applicant accords with various rules of market access. CBRC will complete the examination and approval within the given period as long as the applicant conforms to the rules in which it enables the qualified auto financing companies to provide good financing services for customers. CBRC also disclosed that domestic enterprises are now stepping up efforts in establishing auto-financing companies.
China published rules on auto financing in October as part of the nation's World Trade Organization commitments. The regulations require auto financing companies to have at least 4 billion yuan (US$483.2 million) in asset registration, which some local enterprises have said is a little bit too high. They also must have capital adequacy ratios of 10 per cent, which is stricter than the 8 per cent requirement on commercial banks set up in China.
Less than 20 per cent of cars in China are sold with assistance from loans, compared to more than 70 per cent in developed countries. Commercial banks started to provide auto loans in 1998.
By People's Daily Online
Copyright by People's Daily Online, all rights reserved