China is to set up a centralised department formed by various state ministries to co-ordinate action on bankruptcies.
The setting up of the co-ordinating department, led by the State Economic and Trade Commission, is expected to facilitate the passing of the long-awaited bankruptcy law, reported to have been snagged by disagreements between government departments and the largest creditor - the banking sector.
Other members of the new department include the Ministry of Finance (MOF), People's Bank of China (PBOC) and headquarters of the four state banks.
The State Economic and Trade Commission and the PBOC have jointly issued a notice previously addressing the most tricky area of bankruptcy procedures - how to write off debts incurred in a bankrupt enterprise.
In an unprecedented move, the notice puts a cap on the total amount of debt allowed to be written off in bankrupt enterprises in the entire country.
The level is to be decided by the State Economic and Trade Commission and the PBOC.
The notice is only applicable to the 1,000 enterprises and 18 cities selected by the State Council as pilot cases.
