The Study of Bankruptcy to Mainchina Status Own Entity

• Main Authors: Huang Chi-Ting, 黃琪婷
• Other Authors: Li Chi-Keung
• Format: Others
• Language: en_US
• Published: 1999
• Online Access: http://ndltd.ncl.edu.tw/handle/74111114211357001496

碩士 === 淡江大學 === 大陸研究所 === 87 === Abstract: Ever since the mid-1980''s, China started the experiment of ''general company bankruptcy'', Bankruptcy- has since became the key theme of the revolution, and continues to be. The P.R.O.C. bankruptcy Act was passed in 1986, and made the process of bankruptcy official and the number of court cases continues to build up. However, in China, the state-owned company bankruptcy is still a stay-away area, other than those who were actually involved in the process of bankruptcy, not many people went any further into the root of such activity. The objective of this study is to understand the process of state-owned company bankruptcy; the three main parties that are involved: the company, the government and the bank; to find out exactly how they interact with each other, the role they play at different stages of the process of bankruptcy. Due to the lack of existing literature on this subject, the methodology employed here is mainly based on interviews with relevant individuals from all three parties mentioned above. Significant number of cases were selected for the purpose of this dissertation, in order to construct a complete model of the activity of bankruptcy. The main findings of this study are summarized below: 1. All parties engage in the activity of bankruptcy if it is considered to be beneficial to them individually. Because of the low repayment rate and the fact that most creditors are not very concerned with their ability to repay their debt, bankruptcies are mostly demanded by debtors. For the government, they can either gain profit during the process or get away from being held responsible for the company. For the debtor bank, they can either redeem their credit by some bad debts from bankruptcies that are carried out by the central bank, or they could gain interest from the loan they grant to the purchaser of the bankrupted company. 2. The state-owned company bankruptcy in China is practiced under strict rules. It has poor performance and it is not uncommon to see companies suffering from huge loss. The rule states clearly that in order to file for bankruptcy, it is necessary to firstly find a purchaser, who must have the required capital by certain deadline. Also, the central bank sets ratio restriction on the amount of redeemable bad debt. Therefore, in order for companies to be approved for bankruptcy, there are more than one foreseeable obstacles 3. The priority of entering the process of bankruptcy should be the reallocation of those that are made redundant. Although, according to the rule, prior to the proposal of bankruptcy, any profit made from transferring the right of the company''s land usage must be used for employees'' reallocation, but, in reality, there are still many redundant employees hidden in the dark. The biggest challenge China is facing thus would be the issue of redundant employees'' reallocation.