Corporate Bankruptcy Law Launched

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After 12 years of talk, the Standing Committee of the National People’s Congress finally enacted the corporate bankruptcy law on Sunday (according to a report by MarketWatch):

    “The measure modernizes a 1986 bankruptcy law that applied to state-owned enterprises. It’s seen as an attempt to provide a more relevant legal structure to China’s increasingly market-driven economy. ‘The current bankruptcy rules … are widely regarded as outdated as they fail to give sufficient protection to creditors and only touch on state-owned enterprises’, the official Xinhua news agency said.”

The new law covers state and private enterprises, and puts creditors’ interests ahead of employees.

China Prof Law Blog notes a Chinese source for text of the new law, while also pointing to the new Partnership Enterprise Law. More news on both can be expected soon. Both laws are reported to be effective from June 1, 2007.

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2 Responses to “Corporate Bankruptcy Law Launched”

  1. Archive » Bankrupt Policy| China Business Blog Says:

    […] It seems to be a case of “two steps forward, one step back” in relation to the proposed bankruptcy law. China Law Blog notes: “Now it has become clear that China’s 20 […]

  2. Archive » Shareholding Reform (Almost) Completed| China Business Blog Says:

    […] he way, and the next few years are likely to be interesting ones. However, as with the new Bankruptcy Law, it will also be interesting to see what is done with those “special”, “str […]

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