$6.2 billion set aside for bankruptcy plan

PUBLISHED : Tuesday, 09 August, 1994, 12:00am
UPDATED : Tuesday, 09 August, 1994, 12:00am

CHINA has earmarked seven billion yuan (HK$6.2 billion) to help save debt-ridden state enterprises in 18 cities to pave the way for more state giants to close down.

The special fund will be used to pay debts owed by the state enterprises so that they could go bankrupt, the Hong Kong China News Agency reported yesterday.

The agency confirmed that the central Government had found it difficult to implement the bankruptcy laws because the Government was unable to find a solution to the huge bad debts carried by most of the enterprises.

Another obstacle in declaring the enterprises bankrupt was the settlement of the displaced workers.

The agency said the central Government would select two to three enterprises in each of the 18 cities for the bankruptcy experiment.

Official statistics said more than 1,000 state enterprises had been declared bankrupt since the Bankruptcy Law became effective six years ago.