Chinese Bankruptcy Law

1. It is still not good timing for PRC to establish the personal bankruptcy, esp. credit
system is not perfected in China now. So, the wholesale industry will not worry about it. There is no consumer debt for the individual to petition the bankruptcy.

2. Both debtor and creditor can petition the debtor's bankruptcy. Also, debtor can use the restructure/reorganization assets to save the debtor. Then the going concern value can be preserved. Creditors may get higher paying off rate.

3. For courts, due to the history reason, there was only state-owned enterprise who petitioned the bankruptcy as the policy bankruptcy was accepted. Also, laid off workers are a concern of the courts if the bankruptcy petition is accepted and it may cause the social unrest and workers may adopt the "SHANG FANG". Then, the government may exert the pressure on the courts. Courts do not want to be troubled due to be involved in the bankruptcy. Another reason is  the social psychology: "PO CHAN" in Chinese (Pin yin of the bankruptcy) means the broken and go to die. So, there is kind of natural resistance to this word and further negative influence the application of the law in real life.4. As the trustee in China, there are several ways to appoint the trustee. The common way adopted now is to establish a trustee list (after evaluation by the experts) by the courts and then, the court will choose one from the list random by way of drawing lots. It seems fair and no corruption will be caused. As a trustee, it will assume the responsibility it caused loss to the any other party. The way is to be fined by the court, compensate the relevant party who suffered the loss or the name of the trustee will be moved out of the list by the court.