As part of the State Council's efforts to reform the
overall business environment, six major cities – Beijing,
Shanghai, Chongqing, Hangzhou, Guangzhou and Shenzhen – have
since the end of October 2021 been part of a pilot programme aimed
at creating a more transparent and efficient exit mechanism for
market players. Among the reforms, creditors of bankrupt companies
will be allowed to recommend administrators to be appointed by the
courts.
CURRENT SYSTEM
Under the current Enterprise Bankruptcy Law and its
interpretations, courts appoint administrators from a local
register by means of, among others, random selection, open
invitation to bid, and recommendations from financial regulators.
In practice, however, administrators are rarely appointed through
recommendation.
