ICBC Leasing’s Ambition in Shipping

In recent years, with several major operations, ICBC Leasing has attracted the attention from the industry,and there are headlines such as“ICBC Leasing, the world largest owner?”,“ICBC Leasing intends to transform to be shipowner” etc. Against this background, the reporter had an interview with Yang Changkun, the General Manager of shipping finance division of ICBC leasing concerning the questions that we are mostly concerned.

Does ICBC leasing, as the industry said, aim to become the world's largest ship owner? Yang Changkun explained that this is the interpretation of the industry. In his eyes, the fast development of ICBC leasing’s shipping sector is different from becoming ship owner. ICBC leasing business is mainly composed of three sectors, aviation, shipping and equipment.According to Yang Changkun, the shipping industry is the heavy asset industry, and the pattern of financing leasing requires the leasing company to be the asset owner. As for company itself, holding the asset is rather for financing not for operation purpose. In short, heavy asset industry needs the participation of financing bodies in various forms.Therefore, in essence, the investment in ship and marine equipment is a financing or financial operation.

In Yang Changkun’s view, the rapid rise of Chinese financial leasing industry has a profound historical background and objective reasons. Firstly, shipping industry is a cycling industry, the European investment banks have invested heavily in the last round of market peak, and they suffered great loss when the market went downward, retreating to some extent from shipping business is a reluctant choice.Secondly, in this round of financial crisis, many European banks need bail out from government, the government will in turn require the banks to give priority to the development of local enterprises, thus cutting its international business investment. Even so, in the market, there is still demand for ship construction and transaction, as well as demand for financing. And this is a good opportunity for development of China's shipping financial leasing industry.

Yang Changkun told the reporter that seen from the historical development track of the shipping financing industry, Europe and the USA dominated in the past. This round of financial crisis made them suffer heavy losses,but it is an opportunity for China. Judging from the current situation, China’s financial industry has the ability to play a more important role in the field of world shipping financing, promoting China’s shipping, shipbuilding and related industries to develop to high-end through the unique function of financial instruments. Therefore, for the future development, ICBC leasing has more magnificent plans.

Yang Changkun said,“paying more attention to overseas market is based on two strategic considerations. The first is to promote domestic industrial transformation and upgrading and the demand for Chinese enterprises’ going out; the second is that we must adapt to the needs of international development.Only when we are familiar with the international industry game rules and manipulation techniques, can we fully play the leverage of financial leasing, and promote development ofrelated domestic industries.”

Seen from the development situation of ICBC leasing in international market, the overseas development model of“made in China and China financial services” proposed by ICBC leasing has been very effective.”

“In the future we will also increase the layout of the high-end market.” Yang Changkun further stressed, in particular, to increase the layout of the high value-added ships for which the domestic shipyards have not kept up in technology and competitiveness is still relatively weak. In this regard, we must make adjustments as soon as possible,gradually turning to the upstream and high-end segments of the industry, only in this way can we be more initiative,more powerful and get rid of the dilemma of being controlled by others.

“Specialization, marketization and internationalization”is the development strategy that ICBC leasing has always been adhering to. Yang Changkun considered that judging from a professional view, there are two aspects we should strengthen as soon as possible, one is diversified and personalized design ability of financial service products, the second is its own risk management and control capabilities.Both abilities are the short board that domestic financial leasing companies need to make up for.

Yang Changkun said that the future development point for ICBC leasing is to perform well in design of different types of products, to meet the diversified and personalized demand,and strive to be the leader in this field. Another point is also crucial for the development of the Finance Leasing Company,which is its own risk management and control. Finance is the lifeblood of economic development, the important force to promote the industrial revolution, this has been the consensus of the industry. But how to use the leverage of financial leasing and better help the sustainable development of industry and enterprise is the problem that needs to be solved urgently by the domestic financial leasing industry.