TOWARDS A CHINESE APPROACH OF PERSONAL BANKRUPTCY DISCHARGE: FROM SHENZHEN EXPERIENCE TO NATIONAL LEGISLATION.

The historical development of the Chinese social and economic circumstances well explains the conspicuous absence of a personal bankruptcy law regime. In the context of the rapid modernisation of the economy, there is keen interest in China, expressed across the legislature, the judiciary and the academia, in studying new global developments in personal bankruptcy law. Of particular interest has been the central role that the mechanism of discharge of residual debts plays in rehabilitating debtors in financial distress. The mechanism of discharge of residual debts enables an honest but unfortunate debtor, once their debts have been settled through bankruptcy proceedings, to make a fresh start, fully forgiven of their past indebtedness. The need for a personal bankruptcy regime embodying a residual debt discharge mechanism is widely acknowledged in China but is yet to be implemented at the national level. This article examines the historical developments in China that explain why China has been slow to recognise a mechanism of personal bankruptcy and how socio-economic circumstances have changed vastly, making the introduction of an effective and fair personal bankruptcy system a crying priority. It examines the welcome development in Shenzhen which has adopted a personal bankruptcy law highlighting the concept of making a fresh start. This article appraises the Shenzhen experience in the context of global trends in personal bankruptcy law which positively encourages the reintegration of forgiven debtors into the economy and examines how it could be used as the starting point for a nationwide legislative framework. [ABSTRACT FROM AUTHOR]