On October 19th, 2018, Mr. Han Jiaping, the Director of CFEC and Mr. Li Wei, the Secretary General of CFEC met with Peter Mulroy, the Secretary General of FCI in Beijing Financial Street to discuss the status quo and concerns of China factoring industry.
Director Han introduced the development and problems of factoring industry in China. In terms of company registration, local registration policies have been tightened and the quantity of newly-registered commercial factoring companies is shrinking this year. In addition, local departments in charge of commercial factoring industry have required existing factoring companies to report operational data in order to support regulatory authorities in finding out genuine industrial condition and to make practical administrative rules.
In spite of difficult market condition, factoring industry has met no major risk by far. In the first half of the year, commercial factoring has maintained growth momentum while the following half year witnesses evident decline in business volume. It is estimated that the overall business volume of commercial factoring for 2018 may tie with or even exceed that of 2017. Strong market demand among Chinas SME companies promises commercial industry a bright future and the new regulatory authority--China Banking Regulatory Commission (CBRC) is presumed to facilitate robust development of commercial factoring industry in China.
With a large number of FCI members from China, Secretary Mulroy shows great concern for the growth of Chinas factoring industry, particularly on issues such as CBRC taking over regulation duty of commercial factoring, increased tax burden on factors after replacing business tax with value-added tax (VAT), factors been prohibited from buying credit insurance, the legislation of factoring industry been shelved and industrial risk remaining high.
According to Secretary Mulroy, a sound factoring law system can greatly cut factoring lawsuit in quantity. Previously, FCI has engaged in legislation of factoring law in several countries, and is willing to share such experience with CFEC in support of promoting the legislation process in China.
With great contribution from commercial factoring industry, the business volume of Chinas factoring industry returned to world No. 1 in 2017, Secretary Mulroy emphasizes and applauds CFEC for further facilitating the development of commercial factoring industry.
Exchanges between the two sides also cover items such as re-factoring business in China, funding of Chinese factors, interest rate and commission fee for factors financing business. Furthermore, CFEC and FCI agreed to fully implement the MOU between the two sides and strengthen comprehensive cooperation, particularly in education and training for factoring industry.
In conclusion, Secretary Mulroy sincerely invites Director Han and Secretary Li to attend the 2019 FCI Annual Conference next year and would like to reschedule for attending the 2019 China Commercial Factoring Summit in April next year.
