Abstract: The History of Chinese Bankruptcy Law: Cultural or Institutional Resistance to Western Influence?

Zinian Zhang

Abstract

Bankruptcy law is vital for market efficiency and predictability since it is a powerful means for debt collection so as to protect creditors. Given that China has committed to establish a market economy from the 1990s, understanding China's bankruptcy law may be enhanced if its bankruptcy law history can be properly explored. Whatever bankruptcy laws were enacted by the Qing Dynasty, the Guomingdang Administration, or the present Communist regime, they are likely to be fruits of interaction between China and Western countries. Unlike the plain description of legal history, this article sheds light on China's cultural and institutional resistance toward Western bankruptcy norms when the latter were, intentionally or inadvertently, brought to China during the past century. However, such resistance might also be blended with some eagerness, on the ground that bankruptcy law is likely to be a practical need for the market rather than an ideology-driven policy. Through untangling the history of China's bankruptcy law, this paper attempts to draw a tentative conclusion that China's resistance to Western bankruptcy norms might be sentimental in form; yet in substance under the guise of resistance there might be widespread acceptance, because an efficient bankruptcy regime is requisite for market development regardless of where the market competition is played out. This essay may be the first overarching study of Chinese bankruptcy law history in English, as Western scholars seem to have concentrated on the analysis of China's recent bankruptcy laws, leaving the whole history of Chinese bankruptcy law untouched; Chinese scholars, on the other hand, focus on research within China without being involved in the international academic debate in this regard.