China boosts financial leasing to fund money-starved firms

The sector saw the value of outstanding contracts jump more than 50 percent from a year ago to 3.2 trillion yuan ($500 billion) by the end of 2014, hundreds of times the volume in 2006.

There are currently 30 major financial leasing companies and more than 3,000 smaller ones in China. Nearly all leading banks in China have affiliates in the new business.

China's policymakers have also pinned high hopes on the sector. Premier Li Keqiang said its rapid development will spur investment in equipment and promote industrial upgrades.

Chinese firms, especially private ones, have struggled with a lack of money due to limited financing channels. Bank loans are costly and banks are biased against small companies, while the stock market is less stable and not yet mature.

To address the issue, the central bank has lowered lending interest rates five times and the deposit reserve requirement four times since November to encourage banks to make loans at a lower rate. The central government has also strived to improve and diversify financing channels, including loans, corporate bonds and a multi-layered stock market.

However, the difficulties persist partly due to rising disinflationary pressures and have become a stubborn problem for the broader economy.

China's GDP expanded 7 percent in the first half of 2015, marking the weakest growth rate since the global financial crisis.