Li Shuguang on Personal Bankruptcy: Shortcomings of a Market Economy (AI Translation)
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文｜财新周刊 王娟娟
By Wang Juanjuan, Caixin Weekly
近年来个人债务清理的迫切性愈发凸显，伴随着打着“个贷重整”旗号的债务中介泛滥，“黑灰产”骗局滋生，背后的深层原因是中国个人债务风险管理和化解机制的缺失。在现行法规之下，个贷逾期后难以通过合法途径解决，债务人有时陷入“以贷养贷”或是求助于“私人协商”，甚至试图通过非法渠道“优化债务”，但债务可能反而如雪球一般越滚越大。
In recent years, the urgency of addressing personal debt clearance has become increasingly apparent, paralleled by the proliferation of debt intermediaries touting "personal loan restructuring." These have given rise to scams within the "black and grey industry," underpinned by the lack of mechanisms in China for managing and resolving personal debt risks. Under current regulations, once personal loans are overdue, they are difficult to resolve through legal avenues. As a result, debtors sometimes resort to "borrowing to repay" or seek "private negotiations," and even attempt illegal methods to "optimize debt," often causing their debts to snowball further.
从法律法规层面建立个人破产制度，不失为解题关键。个人破产，在国际上也称之为消费者破产、自然人破产。个人破产制度，是指当债务人资产不足以清偿债务或丧失清偿能力时，由司法介入宣告其破产，并对其财产进行清算或重整，在一定条件下对其债务进行豁免，以及确定破产过程中权利义务的法律制度。
Establishing a personal bankruptcy system from a legal and regulatory perspective could be the key to solving the problem. Internationally, personal bankruptcy is also referred to as consumer bankruptcy or natural person bankruptcy. The personal bankruptcy system involves judicial intervention to declare an individual bankrupt when their assets are insufficient to cover debts or they lose the ability to repay. It includes the liquidation or restructuring of assets, conditional debt forgiveness, and a legal framework to define rights and obligations during the bankruptcy process.
个人破产制度能够使“诚实而不幸”的良善债务人从债务的泥潭中解脱出来，获得东山再起的机会，进而释放市场活力。债务人可依此部分免除债务，但也要接受一定期限内失去部分权利的限制条件，比如征信记录、被限制基本需求以外的高消费等。
A personal bankruptcy system can provide "honest yet unfortunate" debtors the opportunity to climb out of a debt quagmire and make a fresh start, thereby revitalizing market dynamics. Under this system, debtors can partially get relieved from their debts, but they must also accept certain restrictions on their rights for a specified period, such as constraints on credit records and high consumption beyond basic necessities.
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- China lacks effective mechanisms for personal debt management, leading to scams and worsening debtor situations. A proposed personal bankruptcy system could offer legal resolution through asset restructuring and debt forgiveness.
- Shenzhen's pilot personal bankruptcy regulations and similar provincial initiatives allow debtors to reorganize financially but face resistance from banks due to lack of national legislation.
- Li Shuguang advocates for a national personal bankruptcy law to improve financial risk management and social fairness, suggesting it will create a pressure mechanism for prudent lending.
[para. 1]
- National Institute for Finance and Development
国家金融与发展实验室 - The National Institute for Finance and Development (NIFD) is referenced in the article for providing data on China's household leverage ratio. According to NIFD, this ratio was below 30% in 2011 and has gradually increased, reaching 63.5% by the end of 2023. The institute studies financial development trends and associated risks.
- 1997：
- The State Council issued the supplementary notice 'Guofa Document No. 10' regarding SOEs reform and addressing financial institutions' concerns.
- 2003：
- A national team was established to draft the bankruptcy law, initially including provisions for personal bankruptcy.
- 2006：
- The Enterprise Bankruptcy Law of the People's Republic of China was enacted.
- 2020：
- China's household leverage ratio surpassed 60%.
- March 2021：
- The Shenzhen Special Economic Zone Personal Bankruptcy Regulations were officially implemented, marking a breakthrough for China's personal bankruptcy system.
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