The Underestimated Peak: A Legislative Evaluation of the Bankruptcy Law of China in 1935 from a Modernization Perspective

The evolution of bankruptcy law across most jurisdictions since the Industrial Revolution, further accelerated by globalization over the past two centuries, has centered on the development of modernized debt clearance mechanisms under contemporary bankruptcy regimes. In the historical trajectory of Chinese bankruptcy law, the Bankruptcy Law of 1935 enacted under the Republic of China represents a significant peak in legislative achievement, demonstrating notable alignment with global standards. Its modernization in procedural design, legal philosophy, and institutional structure marks a valuable accomplishment. Drafted by a highly skilled team amidst both domestic and international challenges, the law introduced a reconciliation system, responded thoughtfully to cross-border bankruptcy issues, and was promptly translated into English to emphasize its international outlook. Nevertheless, despite its technical sophistication, the law has remained underappreciated in contemporary legal scholarship, largely due to weak enforcement during wartime after its enanctment and the subsequent overhaul of the legal system in 1949. This study provides a comprehensive review of the legislative history of the 1935 Bankruptcy Law, highlights its key achievements, and assesses its contributions to the modernization of Chinese bankruptcy law from a historical perspective.

Prof. Xiahong Chen is currently a visiting scholar at the Faculty of Law, University of Oxford. He is a fellow of the Bankruptcy Law and Enterprise Restructuring Research Centre at the China University of Political Science and Law (CUPL), and the editorial director of the Journal of CUPL. He has been appointed as a member of the Drafting Group for the Revision of the Bankruptcy Law under the Financial and Economic Committee of the National People's Congress in China. Also, Prof. Xiahong Chen is a member of the INSOL International, the INSOL Europe and the American Bankruptcy Institute. In recent years, Prof. Xiahong Chen has primarily focused on researching and teaching bankruptcy law. He has written several Chinese books on bankruptcy law, including The Common Sense of Bankruptcy Law, Notes on Bankruptcy Law, Commentaries on Enterprise Bankruptcy Law and Protection of Employees' Rights and Interests in Bankrupt Enterprises: Models, Situations and Procedures. He has also edited a few books, such as Bankruptcy Law Letters and the ‘Frontier of Bankruptcy Practice’ series. He frequently writes for his column called "The Temperature of Bankruptcy Law" in The Papers, one of the leading online media sites in China.

Kristin van Zwieten is Clifford Chance Professor of Law and Finance in the Law Faculty and the Gullifer Fellow at Harris Manchester College. She is Director of the Commercial Law Centre at Harris Manchester College, a Research Member of the European Corporate Governance Institute, and a co-founder and editor of the Oxford Business Law Blog. Prior to taking up her post at Oxford, Kristin was the John Collier Fellow in Law at Trinity Hall, Cambridge. Kristin’s research interests are broadly in law and finance and law and development. She has a particular specialism in corporate insolvency law, and her published works in this area include Goode on Principles of Corporate Insolvency Law (5th ed, 2018) and Commentary on the European Insolvency Regulation (2nd ed, OUP 2022). She acts as a consultant to the World Bank in relation to insolvency related law reform, and in this and other capacities has been involved in various insolvency law reform projects in emerging markets. She has a particular interest in Indian corporate insolvency law, having completed a doctorate (in the Oxford Law Faculty) on the subject. Kristin previously qualified as a lawyer in an Australian corporate law firm.

Dr. Geleite Xu is currently an Early Career Academic at the School of Law and Social Sciences at the University of Derby. He obtained both his LLB (2013) and LLM (2016) degrees from China University of Political Science and Law, and his PhD (2021) from the University of Essex. Before joining the University of Derby in September 2024, Dr. Xu held a postdoctoral position at the Guanghua Law School at Zhejiang University for three years. Dr. Xu’s primary research interests lie in insolvency law and financial law, with a particular focus on crisis management and market exit mechanism for financial institutions, governments’ position in enterprise insolvencies, and micro and small enterprise insolvencies. He has published several research articles and book reviews in both Chinese and English, secured a research grant from the China Postdoctoral Science Foundation, and served as a co-investigator in two national social science projects in China.