The Curious Case of Inactive Bankruptcy Practice in China: A Comparative Study of U.S. and Chinese Bankruptcy Law

Yujia Jiang | January 1, 2014

The current Chinese bankruptcy law has been enacted and effective for seven years, with academic discussions and judicial decisions emerging at a rapid speed. However, reorganization practice in China is considerably less active than that in the United States. This Note provides an overview of the current state of Chinese bankruptcy law from a comparative perspective and tries to discern some possible explanations for China’s inactive bankruptcy practice. After introducing the major provisions under Chinese bankruptcy law and comparing them to their U.S. counterparts, this Note identifies several possible factors that could discourage bankruptcy practice in China, all of which relate to the overly broad judicial discretion and government involvement in Chinese bankruptcy practice.