Taipei, April 26 (CNA) Taiwan-based China Development Financial Holding Corp., which owns investment bank China Development Industrial Bank (CDIB), opened a financial leasing company in the city of Kunshan in China's Jiangsu Province Thursday.
The financial leasing unit -- CDIB International Leasing -- is China Development Financial's first foothold on the mainland, the financial holding said.
Over the next five years, the financial leasing company will raise its capital size to US$250 million (NT$7.37 billion) from the current US$20 million in a bid to provide a wider range of services to small- and medium-sized corporate clients.
China Development Financial said the company will use Kunshan as a base for future expansion in its financial leasing business as the city has provided many incentives for foreign investors to grow.
After the establishment of the Kunshan base, the financial holding firm said, the financial leasing unit will extend its reach to neighboring cities such as Shanghai, Nanjing and Hangzhou in an initial phase.
In the future, CDIB International Leasing will set up branches in southern Chinese cities, including Guangzhou, Shenzhen and Xiamen, while expanding its presence to western and northern cities like Chongqing, Chengdu, Beijing and Tianjin.
CDIB International Leasing has targeted a number of industries on the mainland, such as medical services, biotechnology, printing, transportation and machine tools, which are strongly supported by Chinese authorities.
The financial leasing firm said it expects to break even in 2013 and turn a profit in 2014.
Guan Aiguo, a Communist Party chief in Kunshan, who attended the opening ceremony of CDIB International Leasing, said the authorities in the city are planning to establish a finance company to exclusively provide credit guarantees to Taiwanese investors operating on the mainland.
In addition to the finance company, Kunshan Chuangye Holding Co., owned by the Kunshan city government, will work with China Development Financial to set up a channel to provide financial services to enterprises across the Taiwan Strait.
(By Tien Yu-pin and Frances Huang)