GOVERNMENT departments which refuse to allow ailing state enterprises to go bankrupt will have to subsidise the repayment of their debts under the new bankruptcy law to be passed early next year. A member of the drafting committee of the bankruptcy law under the National People's Congress, Wang Weiguo, believed the drastic provision would lead to a rise in bankruptcy of state enterprises as local governments might not be able to subsidise the repayments. Under the existing law, a state enterprise can only go bankrupt with the approval of relevant government departments. 'If the government can't do something to subsidise the repayment of debts, the enterprise would have the right to file a bankruptcy application to the court,' Mr Wang said. 'This is to allow the market to determine which company can survive.' The new bankruptcy law, which contains 10 chapters and 193 articles, will introduce a new concept of reconstruction of debt-ridden enterprises. Chapter five of the draft says that a reconstruction plan, formulated by administrators, would have to be passed at a creditors' meeting and be approved by the court. If the assembly of creditors failed to pass such plans, the court could be authorised to grant approval under certain conditions. Mr Wang said the provisions would completely change the practice of reconstruction. 'At present, creditors have very little incentive to apply for reconstruction as they have no say at all and they don't know the result of the reconstructions,' he said. 'But the new law would allow creditors to participate in reconstruction and they can choose to wind up an enterprise if they believe the enterprise cannot be saved.' Another member of the drafting team, Wang Wenye, expected regulations to be issued clarifying settlement with employees and sales of land use rights. The new law would stipulate that proceeds from the sales of land use rights have to be used to settle employees first.