Vol 19 (2022) - Issue 2

Article preview

Key Issues of Bankruptcy Reorganisation of ‘Zombie Enterprises’ in China

Synopsis
'Zombie enterprises' are those that continue to operate despite a lack of demand for their goods and services, whether caused by industrial reorganisation or economic development, resulting in such enterprises accruing heavy debts. Thus, 'zombie enterprises' must generally rely on the financial aid of local government and state banks to survive.
'Zombie enterprises' have long been a severe economic and legal problem for China's continued industrial and economic development. Therefore, the reorganisation of 'zombie enterprises' within China is necessary for economic reform. This article aims to explore potential issues, such as heavy tax burdens, government intervention and cram-down rules in the bankruptcy reorganisation proceedings, which may influence the process of reorganising 'zombie enterprises'.