It’s proposed in the Government Work Report delivered at the “two sessions” to strengthen bankruptcy liquidation and reform of procedures regarding zombie enterprises.
The two sessions, namely the First Session of the 13th National People’s Congress (NPC) and the First Session of the 13th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), are being held from March 3 to 20 in Beijing.
Qiao Bin, an NPC deputy, said that legal measures are used in bankruptcy trials to resolve overcapacity, eliminate zombie enterprises and improve enterprise exit mechanisms for the promotion of supply-side structural reform.
Statistics show that in 2017 there were 16,200 new commercial enterprises every day. But since 2003, less than 70 percent of them survived for five years and many are debt-ridden and weak performers.
To smoothly handle these so-called zombie enterprises, the SPC has worked to promote bankruptcy professionalism with such steps as setting up the bankruptcy trial tribunal.
Shi Xiaohong, a member of the CPPCC National Committee, said that in hearing bankruptcy cases we cannot pursue only speed and a high claim settlement rate, but must raise our service awareness to make the “bankrupt enterprises” voluntarily come to the court for reorganization and resource reconciliation, after which they can return to the market.
As of the first half of 2017, the number of court liquidation and bankruptcy tribunal hearings had increased from five in 2016 to 97, an indication of the quality and efficiency of courts in dealing with these troubled companies.
