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China to end gov't bailout for bankrupt SOEs
China will stop subsidizing bankrupt state-owned businesses within four years, an official with the State-owned Assets Supervision and Administration Commission (SASAC) said Saturday. The commission's four-year-plan has been approved by the State Council, said Shao Ning, vice minister in charge of the commission, at a forum held on Saturday. In four years, SOEs (state-owned enterprises) will follow market rules and apply for bankruptcy according to the same laws and regulations as foreign and private companies. In order to help the badly performing SOEs to retreat from the market smoothly, the Chinese government has made a series of favorable bankruptcy policies on employees' rights, assets management and bad loans. In recent years, 3,377 SOEs with bad performance have gone bankrupt under these policies with 6.2 million employees involved. There are still more than 1,800 SOEs to be closed down. On February 2, an executive meeting of the State Council said it approved the bankruptcy plan. So far, Beijing, Shanghai, Jiangsu, Zhejiang and Fujian have stopped the government bailout practice. The draft corporate bankruptcy law was submitted to China's top legislature for first hearing last June.
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