The Long March towards China’s New Bankruptcy Law

Abstract

China’s insolvency regime has been in a state of transition for a relatively long period of time, although a new Bankruptcy Law was finally to be passed in 2005. The draft of the Bankruptcy Law of the People’s Republic of China (herein after referred to as “Draft Bankruptcy Law”, went to the 10th session of Standing Committee of the National People’s Congress (NPC), China’s top legislative body, for deliberation on 21st June 2004. The Draft Bankruptcy Law was submitted to the meeting of the National People’s Congress in March 2005. It is useful to seek to understand the background against which this new law has emerged. Until the new Bankruptcy Law comes into effect, bankruptcy was governed by a variety of legal instruments and procedures discussed in this paper. It is likely that the pre-existing approaches to dealing with insolvency in China will also have some continuing effect after the enactment of the new PRC Bankruptcy Law. This earlier history of bankruptcy laws in China is therefore of interest.

Keywords: China, Bankruptcy Law Reform, Background, Legislative History

JEL Classification: G33, G30, G28, N25, P 31