REGULATIONS
China's Bankruptcy Law Modified for 2,116 State Companies
September 28, 2006
John R. Rieger

"The law was just passed and is already being changed." - John Rieger ARTICLE TOOLS Print Version Reprints RECENT ARTICLES China is the region's top stop for exporting Improving wire transfers Quantifying your banks' performance RMB roams the region

Chinese authorities have already modified the recently passed bankruptcy law to exempt 2,116 state companies from the new rules until January 1, 2009.

The modification restricts creditors from forcing these companies, which are considered to be at financial risk by the government, into bankruptcy. The authorities were concerned about the social and financial impact of too many employees losing their jobs and becoming unemployed within such a short time period.

After working on a draft law for 12 years, the Chinese Parliament adopted the new bankruptcy law on Sunday August 27, 2006. The law was needed to replace out-of-date rules that have been in place since 1986 and applied only to state-owned enterprises.

The new rules apply to both private and state owned entities, including foreign companies.

See previous article: China's Parlaiment Approves New Bankruptcy Law

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