The Evolution of Comparisons of Laws in Bankruptcy Legislation: The Case of China and Mongolia

Abstract

ZHENGYAO Wang and NARANTUYA Lunkhdev

The purpose of this study is to comprehensively evaluate China's and Mongolia's current bankruptcy law frameworks, uncover the legal basis and social functions of the enterprise and personal debt solution system, and make legislative recommendations for results to construct a modern bankruptcy system. It focuses on the main processes of Asian countries' bankruptcy laws, meticulously comparing essential links such as the requirements for commencing bankruptcy procedures, administrator functions, debtor property handling, and reorganization and liquidation rules. In the context of global economic integration, bankruptcy law, as the primary system of firm exit and debt repayment, is critical to maintaining market order and protecting creditors' interests. In particular, as the personal bankruptcy pilot in China has progressed, the need to link the personal debt clearance mechanism with the existing enterprise bankruptcy law has become more apparent, providing a new dimension for improving the full-chain system of market entities exiting. China and Mongolia, as major Asian nations, have different economic models and legal traditions, and their bankruptcy law systems reflect this. It is worth noting that the rebirth rules for "honest but unfortunate" debtors in the personal bankruptcy pilot in Shenzhen, China, provide a link between business owners and natural person bankruptcy, whereas Mongolia does not have personal bankruptcy legislation, and its bankruptcy law still lacks a systematic arrangement for natural person debt resolution. The variations between the two nations' legal systems serve as a comparative sample for cross-border bankruptcy study, revealing both the similarities and problems of bankruptcy system reform in developing countries.

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