These older companies are the ones which set up in the 1980s as opposed to the ones that have appeared in the last few years.

The old financing leasing agents now have many debts because of lease holders' failure to pay rents and fees and a lack of laws and regulations governing leasing in the past.

"Many Japanese investors, early birds in China's leasing market, are now preparing to leave,'' Wang Jun, vice-president of the China Orient Leasing Co Ltd, said.

Orient was the country's first financing leasing company, set up in 1981 by Rong Yiren, the former vice-president and ex-chairman of China's premier investment firm CITIC.

European and American investors, newcomers to the market who are free of debt and innovative in their methods of business are taking the place of their Japanese competitors and enjoying the improved investment environment, said Wang.

He was speaking Tuesday at the annual meeting of the leasing committee of the China Association of Enterprises with Foreign Investment.

China specified its rules of contract for financing leasing in the new Contract Law decreed last year.

Foreign leasing companies still enjoy preferential treatment from the Chinese Government over their domestic counterparts, according to the People's Bank of China's regulations on the administration of financing leasing companies, issued earlier this year.

The Ministry of Finance is now drafting accounting standards for financing leasing firms and the State Taxation Bureau is detailing tax policies to encourage foreign leasing companies to buy equipment made in China, officials indicated at the meeting.

Foreign leasing companies lent US$300 million in total last year, said Li Guocheng, chairman of the leasing committee.

(China Daily 11/15/2000)