China’s Bankruptcy Law Odyssey: Exploration, Promotion, and Reform (2007–2022)

This article examines the Enterprise Bankruptcy Law of the People’s Republic
of China (EBL), from its establishment in 2007 through 2022. It builds on the
framework of Judge Zhang Hengzhu, segmenting the development into three
stages: Exploration, Promotion, and Reform. The analysis commences with the
Exploration Stage (2007–2011), highlighting initial challenges in establishing
a corporate bankruptcy regime. It then transitions to the Promotion Stage
(2011–2015), marked by the Wenzhou financial crisis and subsequent efforts
to streamline and publicise bankruptcy procedures. The final phase, Reform,
is broken into two periods. The early period (2015–2018), observed significant
legal reforms leading to a surge in bankruptcy filings. The next period, (2019–
2022) witnessed global reforms with China placing a revised EBL on the
legislative agenda. The article underscores the EBL’s pivotal role in China’s
economic transformation, detailing its influence on corporate restructuring,
creditor rights, and the handling of “zombie companies”.