GE Capital to operate a finance arm

GE Capital has received permission from China's central bank to operate the first wholly owned finance company by a non-banking foreign financial institution on the mainland.

The finance company, to be set up in Shanghai's emerging business district of Pudong, will offer foreign currency commercial lending, financial leasing and other financial services to foreign-funded enterprises and some Chinese companies.

GE Capital China country manager Alex To Kit said the finance company was applying for a commercial business licence from the State Administration of Industry and Commerce.

'We hope to be legally established by the middle of the year or in the early part of the second half,' he said.

GE Capital Asia Pacific president Daniel Mudd said: 'The approval marks a milestone for GE Capital in China and is one of the region's most important strategic initiatives in 1977.' Under the terms set by the People's Bank of China, the finance company may also issue company bonds, which is a first by a foreign finance company.

'We will work with the central bank to develop company bonds should we need funds for our operations,' Mr To said.