IRI Co-Hosts Conference Examining China's Draft Bankruptcy Law

June 10, 2002

IRI co-sponsored a symposium on China's draft bankruptcy law with its Chinese partners the Institute for Asia and Pacific Studies (IAPS) and the Finance and Economic Committee of the National People's Congress (FECNPC) from April 23-27 in Beijing. Focus was unwavering and discussion candid during the hands-on working conference, which consisted of an article-by-article analysis of the law by four visiting experts from Australia, Hong Kong, the Philippines and the United States, and their Chinese counterparts.

Comments and questions following the analysis revealed areas of particular concern to the Chinese legislators, including a lack of inclusion of consumer bankruptcy provisions, specifics on the commencement of bankruptcy cases, the number and roles of various functionaries in bankruptcy proceedings, brevity and lack of detail within the law, the role of the courts, the inclusion of financial institutions, and how to account for State Owned Enterprises (SOEs) under the law.

During the final two days of the conference, IRI staff and the four foreign experts compiled a 45-page report entitled "Comments and Suggestions on the Draft Bankruptcy Law of the People's Republic of China," which was presented to the leaders of FECNPC and the Bankruptcy Law Drafting Committee at the Great Hall of the People on the final evening of the symposium.

Chinese legislators have been working to draft a new bankruptcy law since 1994. Although bankruptcy legislation was slated to be passed this summer, recent labor protests in the northeastern provinces of Liaoning, Jilin and Heilongjiang have caused top Chinese legislators to shy away from passing bankruptcy legislation in the near future, as new insolvency standards could have profound social and economic repercussions, causing more widespread social unrest.

IRI has worked with IAPS since 1993 to support the constitutional authority of the National People's Congress as China's supreme lawmaking body.

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