ABSTRACT
On 1 June 2007, a new insolvency law came into force in China.1 The passage of this new law was the culmination of a 12-year legislative process and it marked a significant milestone in China’s economic development and market reforms.2 The new law removes hurdles which had hitherto existed to the liquidation of state-owned enterprises, it addresses the inadequacies of the previous bankruptcy legal framework, which had become outdated, and it promises to contribute to a stable investment environment.3 In contrast to the previous patchwork system of insolvency laws that had been in operation, this new law will provide a unified system which applies to both state-owned enterprises (SOEs) and enterprises in the private sector with legal person status. This new law for the first time establishes the legal office of ‘administrator’ replacing the concept of the ‘liquidation group’,
1 Literature discussing the new law includes Shi, J., ‘Twelve Years to Sharpen One Sword: The 2006 Enterprise Bankruptcy Law and China’s Transition to a Market Economy’ (2007) 16 Norton Journal of Bankruptcy Law and Practice 645; Falke, M., ‘China’s New Law on Enterprise Bankruptcy: A Story with a Happy End?’ (2007) 16 International Insolvency Review 63; Parry, R. and Zhang, H., ‘China’s New Corporate Rescue Laws: Perspectives and Principles’ (2008) 8 Journal of Corporate Law Studies 113; Bufford, Hon S.L., ‘The New Chinese Bankruptcy Law: Text and Limited Comparative Analysis’ (2007) 16 Norton Journal of Bankruptcy Law and Practice 697; Qi, L., ‘The Corporate Reorganization Regime under China’s New Enterprise Bankruptcy Law’ (2008) 7 International Insolvency Review 13; Booth, C., ‘The 2006 PRC Enterprise Bankruptcy Law: The Wait is Finally Over’ (2008) 20 Singapore Academy of Law Journal 275. For a detailed discussion, see Parry, R., Xu, Y. and Zhang, H. (eds), China’s New Enterprise Bankruptcy Law: Context, Interpretation and Application (2010, Ashgate, Aldershot); Li, S. and Wang, Z., ‘China’s Bankruptcy Law after Three Years: The Gaps Between Legislation Expectancy and Practice and the Future Road’ (2010) 7 International Corporate Rescue 303.
