The political determinants of corporate reorganisation in China

Authored by: Roman Tomasic , Zinian Zhang

Routledge Handbook of Asian Law

Print publication date:  November  2016
Online publication date:  November  2016

Print ISBN: 9780415659406
eBook ISBN: 9781315660547
Adobe ISBN: 9781317337409


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This chapter examines the political factors that have influenced the management of court-supervised corporate reorganisations in the People’s Republic of China (PRC) following the passage of the PRC Enterprise Bankruptcy Law 2006 (EBL 2006). It follows a wider body of research that has pointed towards the political determinants affecting the way in which corporate governance is structured in different countries, including China. 1 Examples of political considerations affecting the implementation of the EBL 2006 are discussed. China’s new bankruptcy law has been hailed as representing ‘a large step forward in clarifying and strengthening’ the rights of creditors (Peerenboom and He, 2009: 13). To some degree, this is true. The Law has sought to move away from the largely political and administrative mechanisms for dealing with corporate insolvency, and to make much greater use of the courts. However, China’s law reforms seeking to support the rapidly developing market economy have taken place in an environment in which the state remains a dominant player in markets and in shaping and implementing legal reforms.

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