This thesis critically explores the prospects of China, the world’s second-largest economy, officially adopting the Model Law on Cross-Border Insolvency under the Belt and Road Initiative (BRI). The major challenges and opportunities it faces in doing so are of central consideration.
A corollary of transnational business activities under globalisation is a rise in cross-border insolvencies. However, domestic policies on private international law related to insolvency are generally inefficient because of varying insolvency policy preferences. Scholars have now encapsulated three key consensuses for efficient cross-border insolvency systems. First, a modified universalism should be used to balance the facilitation of cooperation and the alleviation of local interests. Second, uniform frameworks and texts should be harnessed to reduce the issues arising from diversity between national systems. Third, reforms of this legal framework should be incremental rather than wholesale to avoid deterring sovereign-sensitive states from the outset. For that matter, the 1997 Model Law is hailed as an effective instrument for managing cross-border insolvency matters by virtue of its consistency and predictability in the recognition and assistance of foreign insolvency proceedings in enacting States.
Additionally, this thesis offers a Chinese perspective on the adoption of the 1997 Model Law and has identified a developing Chinese approach in recent Chinese cross-border insolvency practice. This thesis finds that the attitude of Chinese policymakers, who had been longstanding indifferent to cross-border insolvency cooperation, has changed significantly under the BRI. Consequently, this thesis assumes that the BRI is an important catalyst that will pave the way for adopting the 1997 Model Law in China. However, drawing from the implementation of cross-border insolvency judicial arrangements between Mainland China and Hong Kong, this thesis also acknowledged that Chinese legislators will not faithfully reproduce the 1997 Model Law. They will make carve-outs and modifications in favour of local interests in public policy exceptions, turning over of local assets, the availability of foreign law in China, and court-to-court communication. This thesis also argues that the bilateral investment treaties (BIT) may be part of this framework if China adopts the 1997 Model Law, as BITs can cater for the perceived shortcomings of the 1997 Model Law.
