How did cases fair under the old bankruptcy laws?

From 1989 until 1994 only a few bankruptcy cases were filed. In 1989 the courts accepted 98 cases; in 1990, 32 cases; in 1991, 117 cases; and in 1992, 428 cases.
In 1994 the government attempted to draft a new national bankruptcy law, despite concerns over unemployment. The first draft was completed in 1995. This was then redrafted in 1998 and numerous times subsequently, resulting in the draft of 2004, which formed the basis of the newly enacted Enterprise Bankruptcy Law discussed below. Between 1994 and 2004, 3,484 state companies went bankrupt, with US$28.5 billion in repayment debts, written-off by State-controlled banks. 1,828 State-owned enterprises still await approval for declaration of insolvency, amounting to US$14.7 billion. From a slow start in 1988, the number of bankruptcy cases steadily increased. More than 16,000 enterprises declared bankruptcy from 1988 to 2004. In 1994 only 395 of the total 1,624 bankrupt enterprises were State-owned. In 1997, approximately 3,060 of the 5,396 enterprises filing for bankruptcy protection were State-owned, while the remainder were private and Sino-foreign joint enterprises, indicating a mix of enterprises filing for bankruptcy

(01/01/07)

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