China’s Covid-19 Response: The Role of Bankruptcy Law and ‘Typical’ Cases

18 Pages Posted: 22 Mar 2022

See all articles by Yang Zhang

Yang Zhang

Wuhan University - School of Law; Wuhan University

Andrew Godwin

Melbourne Law School

Stacey Steele

University of Melbourne - Asian Law Centre

Date Written: March 21, 2022

Abstract

This article examines responses to the Covid-19 crisis in China in the context of emerging corporate bankruptcy law and practice as demonstrated by the Supreme People’s Court selection and publication of eight ‘typical cases’ involving enterprises in financial difficulty during the pandemic. The article analyses the differences between ‘guiding’ cases, which have the greatest precedential value, and ‘typical’ cases and the potential for typical cases to affect the approach of lower courts to bankruptcy cases both during and after the pandemic, which coincided with a significant increase in the number of formal bankruptcy filings in China. We find that the courts claim an important coordinating role in the typical cases and openly apply the law as set out in the Enterprise Bankruptcy Law flexibly – with a focus on reorganisation-type proceedings – and that social stability remains a paramount objective. The strategic use of bankruptcy law as part of the response to the crisis and the publication of these cases by the Supreme People’s Court underscore the increasing sophistication of China’s corporate bankruptcy law and practice and the continuing role of the state in encouraging the use of debt workout and restructuring techniques within a robust, yet controlled, environment.

Suggested Citation

Zhang, Yang and Godwin, Andrew and Steele, Stacey, China’s Covid-19 Response: The Role of Bankruptcy Law and ‘Typical’ Cases (March 21, 2022). Australian Journal of Asian Law, Vol. 22, No. 2, Article 07: 99-115, 2022, Available at SSRN: https://ssrn.com/abstract=4062602

Yang Zhang

Wuhan University - School of Law ( email )

No. 299 Luo Jiashan Street, Wuchang District
Wuhan, Hubei 430072
China

Wuhan University ( email )

Wuhan
China

Andrew Godwin (Contact Author)

Melbourne Law School ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Stacey Steele

University of Melbourne - Asian Law Centre ( email )

Melbourne
Australia

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