(Yicai) July 18 -- Lingang Special Area, a key testing ground for economic and trade policies within the Shanghai Free Trade Zone, has expanded the scope of its financial leasing business to four more product categories.

Certified financial leasing services providers can now lease new energy equipment, electric vehicle batteries, intelligent manufacturing equipment, and machine tools, four product categories highly consistent with the industrial development direction of Lingang, the special area's management committee announced yesterday.

Financial leasing is a medium-to-long-term financing tool that allows enterprises to use assets, such as equipment or machinery, without transferring ownership rights. Paying a leasing fee instead of much higher purchase prices helps companies ease their cash flow pressure and optimize their asset-liability structure.

The first batch of six institutions certified to pilot the financial leasing business expansion in Lingang are Agricultural Bank of China Financial Leasing, Bank of Communications Financial Leasing, China Merchants Bank Financial Leasing, Shanghai Pudong Development Bank Financial Leasing, Taiping and Sinopec Financial Leasing, and Yangtze United Financial Leasing.

Lingang also broadened its financial leasing business access threshold yesterday, giving not only local institutions in Shanghai but also eligible financial leasing firms from all over the country the possibility to do business in the area.

China allowed financial leasing companies to carry out large equipment leasing business in free trade zones by setting up special-purpose vehicles in 2010. Since then, the scope has gradually expanded from aircraft and ships to containers, construction machinery, vehicles, computing power facilities, and integrated circuit equipment.

As an international financial hub, Shanghai is home to the largest number of financial leasing companies in China.

At the end of last year, there were more than 1,100 financial leasing firms in Shanghai, with total assets exceeding CNY3 trillion (USD417.6 billion), accounting for about 40 percent of the country's total, according to official data. Forty-two of them were registered in Lingang and had assets of CNY50 billion (USD7 billion).

Editor: Futura Costaglione