The New Draft Bankruptcy Law: Will it Advance the Non-performing Loan Industry?

While foreign banks and asset managers are keenly interested in entering the non-performing loan (NPL) market in China, the lack of a unified bankruptcy law that applies throughout the country and to all types of debtor entities remains an obstacle to the orderly development of this sector. Thus, it is encouraging that after ten years of discussion, a unified bankruptcy law appears to be seriously taking shape. A draft is currently undergoing its second reading by the National People's Congress, and a final version is expected to be promulgated in early 2005.