The mainland's draft bankruptcy law will face a preliminary review by the National People's Congress Standing Committee next week during a regular five-day session in Beijing.
Xinhua reported yesterday that the draft law - a priority legislation during the term of the 10th NPC - would be of great importance in 'regulating company bankruptcy' and 'safeguarding the order of the socialist market economy'.
NPC vice-chairman Li Tieying was quoted by Caijing magazine as saying last month that the bankruptcy law, an important step in setting up a market economy, should be introduced as soon as possible.
Li Shuguang , who participated in preparing the draft law, told the 21st Century Business Herald that a strong bankruptcy law was a basic requirement of a market economy.
'Our country was not seen as qualified to be recognised as a market economy during the [World Trade Organisation membership] talks. One of the most important reasons was because we do not have a unified bankruptcy law,' said Professor Li, of the China University of Politics and Law in Beijing.
According to the Caijing report, the new legislation would cover all companies, including state-owned and private firms, a groundbreaking extension from the current law on enterprise bankruptcy.