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Friday, 18 September 2009
Guangdong goes after fleeing debtors
China’s southern Guangdong province has passed a law aimed at barring foreigners and locals from fleeing the country to escape failed business investments and debts.
GUANGZHOU: China’s southern Guangdong province has passed a law aimed at barring foreigners and locals from fleeing the country to escape failed business investments and debts.
Guangdong is the first Chinese province to introduce such legislation, which came into effect on Monday.
The new law gives the authorities the power to stop people at Customs checkpoints if deadbeat debtors - known as laolai in Chinese - try to leave the country. Police officers can also seize their travel documents and impound their vehicles at any location.
Debtors who attempt to leave China from other cities will also be blocked because their names will be captured in a database shared by police officers nationwide, said an unnamed court official.
Those who managed to escape will not be allowed to return until they have cleared their debts.
Thousands of factories in Guangdong - China’s manufacturing and export hub - have folded due to falling demand amid the global downturn.
Some foreign investors, especially those from labour-intensive industries, have tried to avoid formal bankruptcy by leaving behind shuttered factories, equipment and unpaid wages.
Guangdong’s court officials said the legislation was targeted at the growing number of bad debtors in the province.
At least 1,200 deadbeat debtors pursued by the courts have been detained this year, said Mr. Chen Huajie, executive vice-president of Guangdong High People’s Court. The court has also made public the names of more than 300 of them.
‘Many bad debtors refuse to pay their debts, even when they have lost lawsuits,’ Mr. Chen said. The court authorities were often left in the dark when the debtors sold off their properties in China or fled the country.
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Guangdong goes after fleeing debtors
16 September 2009
GUANGZHOU: China’s southern Guangdong province has passed a law aimed at barring foreigners and locals from fleeing the country to escape failed business investments and debts.
Guangdong is the first Chinese province to introduce such legislation, which came into effect on Monday.
The new law gives the authorities the power to stop people at Customs checkpoints if deadbeat debtors - known as laolai in Chinese - try to leave the country. Police officers can also seize their travel documents and impound their vehicles at any location.
Debtors who attempt to leave China from other cities will also be blocked because their names will be captured in a database shared by police officers nationwide, said an unnamed court official.
Those who managed to escape will not be allowed to return until they have cleared their debts.
Thousands of factories in Guangdong - China’s manufacturing and export hub - have folded due to falling demand amid the global downturn.
Some foreign investors, especially those from labour-intensive industries, have tried to avoid formal bankruptcy by leaving behind shuttered factories, equipment and unpaid wages.
Guangdong’s court officials said the legislation was targeted at the growing number of bad debtors in the province.
At least 1,200 deadbeat debtors pursued by the courts have been detained this year, said Mr. Chen Huajie, executive vice-president of Guangdong High People’s Court. The court has also made public the names of more than 300 of them.
‘Many bad debtors refuse to pay their debts, even when they have lost lawsuits,’ Mr. Chen said. The court authorities were often left in the dark when the debtors sold off their properties in China or fled the country.
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