China's top court launched pilot programs on individual bankruptcy that will be conducted in the next five years as the country's legal basis to build the personal bankruptcy system.
The move has been highlighted by the Supreme People's Court in its reform plan on verdict implementation between 2019 and 2023, which was issued on June 11.
As a major component to solve difficulties in the ruling implementation and help improve the business environment, the top court has strengthened efforts to handle bankruptcy-related cases and conduct research in this regard in recent years.
In March, for example, the top court issued two guidelines to effectively solve a rise in bankruptcy disputes and efficiently conclude civil cases.
Liu Guixiang, a member of the top court's judicial committee, said at the time that the guidelines that further clarify the process of handling bankruptcy-related cases would help judges optimize resources in the market and promote high-quality economic development.
Earlier, building a personal bankruptcy system by rule of law had been named as a main job on the top court's to-do list in the following five years.
Allowing personal bankruptcy is undoubtedly an encouragement and tolerance for entrepreneurial innovation. People who took on debt in good faith will be able to start over with the help of the bankruptcy system, according to the top court.
In the plan issued on Tuesday, the court also said it will conduct legal research and an amendment to Chinese Corporation Law with the national top legislature to more effectively promote verdict implementation by preventing people from hiding or transferring properties.
In addition, Chinese courts have been ordered to strictly distinguish cases in which litigants are unable to implement rulings, such as having no properties to use as payment, from disputes in which people have money, but refuse to pay, the top court said.
It pledged in March 2016 that it would spend two or three years resolving difficulties in enforcing rulings for those owning money, whether it be employees suing bosses for unpaid salaries or banks suing borrowers for unreturned loans.
Since then, greater efforts have been made to address the situation. For example, the top court added names of those who refused to abide by rulings to a publicly accessible online blacklist that restricts their consumption of goods and services.
It also signed agreements with dozens of government entities to jointly punish defaulters by barring them from buying airline or high-speed train tickets, along with some other restrictions, until their debts are settled.
Meng Xiang, director of the top court's enforcement division, said the plan disclosed on Tuesday is to consolidate the achievements of these measures and also advise courts across the country to take the ruling's implementation as a long-term job to promote.
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