On June 1, 2007, China's new Enterprise Bankruptcy Law took effect. Years in the drafting, it represents a major change from the prior law. If implemented consistently throughout China, the new law may give foreign creditors more protection than they have received in the past.
Covering twelve chapters and 136 articles, the new law is designed to create a framework for business insolvencies in China. Among the key features are a court-appointed administrator, a creditors' meeting and creditors' committee, voluntary and creditor-initiated bankruptcy proceedings, and reorganization, liquidator, and settlement mechanisms. For more information on the new law, you may find this article from Asia Times Online of interest as well as this discussion by the King & Wood law firm in China. The Bankruptcy Litigation Blog has a recent post that includes an introductory discussion on the topic, as well as several useful links.
In conjunction with its China Law Digest, China-based Lehman, Lee & Xu has prepared a very helpful English translation of the Enterprise Bankruptcy Law of the People's Republic of China. They have also made available a PDF version of the unofficial translation. Among the firm's other resources is the China Blawg, a blog covering Chinese legal topics and related information.
China has not yet adopted the Model Law on Cross-Border Insolvency, which the United States enacted as Chapter 15 of the U.S. Bankruptcy Code, but this new Enterprise Bankruptcy Law appears to be moving China more toward the mainstream of international insolvency legal systems.