Bankruptcy Is Exactly What China Needs

As debt defaults for state-owned enterprises in China rise, international investors find themselves in what for most is a new place: Chinese bankruptcy courts, Bloomberg News reported in a commentary. That may be just the right venue for them, debtors and regulators to meet and take a crucial step toward a better functioning economy. Investors have been spending years to recover their money out of court, but China’s bankruptcy law has now gained enough critical mass to test in modern markets. First trialed in 1986, it’s been expanded and updated in the years since then, including a new section in 2007 that deals with reorganization of companies, modeled on the famous U.S. Chapter 11. By the end of 2017, almost 100 courts dealing with bankruptcy and liquidation issues had been set up. Read more