Summary of Key Points
Starting from the saline-alkali flats of the Bohai Sea, Tianjin Dongjiang has grown into the world's second-largest aircraft leasing hub (with over 2,500 aircraft delivered) and the leading ship leasing center in China (accounting for more than 90% of the national total), thanks to policy innovations such as the bonded leasing model, its strategic location, and industrial clustering. By leveraging financial innovations like financing leases ("borrow a chicken to lay eggs, sell the eggs, and use the money to repay the lease") and free trade accounts (FT accounts), it has overcome challenges related to cross-border capital for domestic high-end equipment (such as the C909 large aircraft) going overseas, including issues with maturity mismatches, foreign debt limits, and exchange rate risks. It is on its way to becoming a global leasing center, but still faces challenges in providing cross-regional services and ensuring policies are effectively implemented.
Detailed Explanation
1. Turning Saline-Alkali Flats into a Global Leasing Hub: The Secret to Dongjiang's Success
Before 2009, it was almost impossible for domestic leasing companies to engage in aircraft leasing. Overseas companies could pay taxes in installments on rent, while domestic companies had to pay the full tax amount at once, which was too costly. Dongjiang utilized the comprehensive protection zone (CFZ) facilities to introduce the "bonded import leasing of aircraft" model, allowing domestic companies to pay taxes in installments, thus opening the door for China's aircraft leasing industry. In the same year, ICBC Leasing used this model to introduce two Boeing cargo planes for China Southern Airlines, marking the first domestic aircraft financing lease transaction.
Seventeen years later, Dongjiang has delivered 2,500 aircraft (second in the world) and 1,200 ships (90% of the national total), thanks to three key factors:
- Strategic Location: Tianjin Port is the largest port in northern China, serving the Beijing-Tianjin-Hebei region and Northeast Asia.
- Pioneering Policies: It is the only "National Leasing Innovation Demonstration Zone" in China, having pioneered over 40 different models (such as SPV special project companies and offshore leasing).
- Industrial Cluster: With more than 2,800 leasing-related enterprises, a complete ecosystem has been formed, covering everything from aircraft procurement to asset management.
By 2025, Tianjin plans to expand its asset scale to 2.8 trillion yuan, aiming to become a global center for aircraft and ship leasing, demonstrating its ambitious goals.
2. How Financing Leases Help Domestic Equipment Go Overseas
The export of domestic large aircraft like the C909 to Vietnam and Indonesia, as well as cargo ships carrying new energy equipment to Africa, relies heavily on financing leases. For example, in 2026, Vietjet Air leased 10 C909 aircraft from Puyi Leasing. This model allows companies to use the aircraft without purchasing them outright, earning profits before paying the rent.
However, there are three major challenges when exporting equipment:
- Maturity Mismatch: Traditional loans have a short term (usually a few years), while leasing agreements often last for over a decade, leading to a shortage of funds.
- Limited Foreign Debt Limits: To mitigate risks, leasing companies set up special SPV (Special Purpose Vehicles) to handle transactions. However, these companies have limited net assets and can borrow only a small amount of foreign currency.
- Exchange Rate Fluctuations: Rent is collected in foreign currency, and changes in the RMB exchange rate can affect profits.
These issues are addressed through financial innovations such as FT accounts and offshore leasing debt registration, which create smoother pathways for cross-border capital flows.
3. How Useful Are FT Accounts in Cross-Border Finance?
FT accounts are special bank accounts introduced by central banks, designed to separate domestic and foreign currency transactions. In simple terms, companies can manage both RMB and foreign currency within the same account without the need for frequent conversions. They use "offshore exchange rates" (e.g., CNH, the offshore RMB rate), which are more flexible than domestic rates and can save costs.
For instance, the Tianjin branch of Bank of Communications used an FT account to finance the receivable rent from domestic aircraft leases. The entire process was settled in RMB, matching the long leasing period and avoiding exchange rate risks. As the only FT account pilot in northern China, Tianjin had exceeded 1.5 trillion yuan in transactions by the first quarter of 2026, ranking third among all banks in the country in terms of volume.
FT accounts also help with foreign debt issues. SPV companies can obtain stable foreign currency funds through these accounts, bypassing the limits imposed on smaller entities.
4. Challenges on the Road to a Global Center
Although Dongjiang is already strong, it still faces several challenges to become a global leasing center:
- Geographical Restrictions on FT Accounts: Previously, companies could only open FT accounts in their registered locations. Tianjin has introduced the "FT branch" model, allowing companies from other regions to open branches locally without having to relocate.
- Inadequate Policy Coverage: This year, Tianjin has implemented a system where one company's application can benefit all banks in the city. Once a company is recognized as high-quality by one bank, it can receive streamlined services from all banks without repeated applications.
- International Competition: Competitors like Singapore and Hong Kong are established shipping centers, so Dongjiang needs to continue innovating financial products (e.g., green leasing and offshore leasing) to compete globally.
However, there are also many opportunities: for example, the expansion of multinational companies' capital pools nationwide and increased foreign loan limits. Banks are also transforming their services, with the Tianjin branch of Bank of Communications focusing on areas like "FT + financing leases" and "FT + exchange rate hedging" to support companies going overseas.
Conclusion
The rise of Dongjiang is a result of the synergy between the aircraft leasing industry and financial innovations (such as FT accounts). Achieving the goals of exporting domestic equipment and becoming a global leasing center requires further policy innovation and the development of new financial tools. The journey ahead is just beginning.