The Regulation of Personal Insolvency in China : Historical Perspectives, Comparative Insights and Future Directions

Gu, Weiqing and Milman, David and Xu, Lu (2025) The Regulation of Personal Insolvency in China : Historical Perspectives, Comparative Insights and Future Directions. PhD thesis, Lancaster University.

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Abstract

This thesis explores the evolution of personal insolvency regulation in China, examining its historical context, comparative insights from established systems, and potential future directions. The research addresses a significant gap in China's legal framework: the absence of a nationwide personal insolvency regime. By investigating the well-established systems in the United Kingdom and the United States, alongside the recent implementation in Shenzhen, this study aims to draw valuable lessons for China's potential nationwide adoption. The research methodology combines doctrinal and comparative approaches. It analyses primary legal texts, including the UK's Insolvency Act 1986, the US Bankruptcy Code, and Shenzhen's Personal Insolvency Regulation. The historical development of personal insolvency laws in these jurisdictions is examined, taking into account cultural influences and legal reforms. Case law review provides crucial insights into practical application and judicial interpretation. Comparative analysis reveals key similarities and differences between the personal insolvency procedures in the UK, US, and Shenzhen, with particular attention to the position of debtors and creditors across these jurisdictions. The research identifies critical issues such as legislative style, pre-bankruptcy debt counselling, discharge mechanisms, and out-of-court procedures. The thesis argues that China's rapid economic growth and evolving market dynamics necessitate the introduction of a personal insolvency regime. It grapples with the challenges of legal transplantation, seeking to balance international best practices with China's unique cultural and economic context. The Shenzhen regulation serves as a valuable case study, offering insights into the potential for nationwide implementation. By synthesising findings from doctrinal and comparative studies, this research contributes to the understanding of personal insolvency law in China and provides insights into its historical context, comparative lessons, and future possibilities. It offers recommendations for establishing a comprehensive Chinese personal insolvency regime, considering both legal and socio-economic factors. The study aims to inform policymakers, legal scholars, and practitioners about the complexities and potential benefits of introducing personal insolvency regulation in China.