The legislation also imposed a deadline to abolish “policy-based bankruptcy” – the practice adopted by the State Council to liquidate loss-making state-owned enterprises (SOEs) and resettle laid-off employees. Unlike the Bankruptcy Law, the administrative procedure has a different hierarchy of liquidation priorities: what a bankrupt SOE owes to its employees and the resettlement charges must be covered first and foremost by its total assets, including the enterprise’s collateral, in order to reduce dependence on local governmental budgets.
同时，该法也为废除“政策性破产”