Vol 20 (2023) - Issue 1

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Cross-Border Insolvency between Mainland China and Hong Kong: New Proposals from a Global Perspective

Synopsis
This article is a second and updated version of our previous publication on the same topic over a year ago, which described and analysed the cross-border insolvency cooperation mechanism between the Mainland of China and the Hong Kong Special Administrative Region reached in 2021. In this second edition, we widen our scope and provide more in-depth considerations. As a first step, we provide a critical analysis of cases decided in the past months and conclude that there are still inadequacies of the present mechanism.
We then further propose five recommendations for the reforms of future Mainland-Hong Kong cross-border insolvency. In short these are the following. First, it is recommended to learn from other 'mixed legal' system.
Second, more work should be done to be in line with international practices such as three UNCITRAL Model Laws. Third, a special China's inter-regional crossborder insolvency arrangement (CICIA) is proposed to accommodate the special 'one country, two systems' regime. Fourth, special attention should be paid to small and medium enterprises. Fifth, a hybrid approach could be adopted to address practical issues.