The Henan Provincial Local Financial Administration issued the “Implementation Rules for the Supervision and Administration of Financial Leasing Companies in Henan Province”. The “Rules” not only raised the entry threshold for financial leasing companies, but also made it clear that the registered capital established by them should not be less than RMB 200 million or equivalent in foreign currency. Additionally, 14 prohibited businesses or activities of financial leasing companies were directly identified. The most critical thing is to clearly classify structures such as roads and bridges as “prohibited areas” for leased property to accurately close loopholes in hidden local debts. In interpreting the “Rules” policy, the Henan Provincial Local Finance Administration reiterated that financial leasing companies must not use structures as leases and local platform companies to carry out after-sales leaseback business and invest capital into local government financing platforms and related projects; they must not use roads, municipal pipelines, bridges, dams, weirs, waterways, holes, non-equipment projects under construction, suspected of adding hidden local government debts, and structures that may affect the normal supply of public services after disposal as leases.

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