Chinese lawmakers urge crackdown on local protectionism in debt cases

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Last updated at: (Beijing Time) Sunday, August 25, 2002

Chinese lawmakers urge crackdown on local protectionism in debt cases

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Chinese lawmakers Saturday called for more effort to curb local protectionism in debt cases while discussing a draft elaboration on Article 313, which deals with punishment for debt repudiation, of the country's Criminal Law.

The draft elaboration, which aims at clearly define debt repudiation, was tabled before the lawmakers for its first hearingon Friday at the 29th meeting of the Standing Committee of the Ninth National People's Congress (NPC).

"Stiffening the penalties for refusing to honor debts fills thecurrent need and the draft will surely help maintain normal law and order once it is passed," said Lu Baifu, a member of the NPC Financial and Economic Committee.

"But the draft should also spell out more clearly how to curb local protectionism that frequently happens in debt cases," he said.

"Cases involving debts are usually very complicated in China," he said. "If a court is partial to local companies, it seems the draft cannot help prevent it."

He suggested that the verdict in a debt case which involved companies from two administrative regions should be approved by a higher court or an intermediate court.

Zeng Xianlin, member of the NPC Standing Committee, also thought that the draft should stipulate clear methods for dealing with the problem of unfair or even wrong verdicts.

"The courts that have been found making wrong verdicts by the higher courts should be held responsible," said the NPC Standing Committee member Feng Henggao. "Judiciary staff who execute the court judgment passively or even collaborate with the debt dodger should also bear legal responsibility."

Jiang Zhenghua, vice-chairman of the Standing Committee of the Ninth NPC suggested local administrative departments or local officials who helped companies evade debts through mergers or by claiming bankruptcy should be severely punished.

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