After a decade of work, China's new bankruptcy law finally came before the country's top legislature Monday.

The draft law, regarded as underpinning the way businesses will account for themselves in China's market economy, will apply to all enterprises- whether State-owned, private or foreign firms.

The aim is to put them on the same footing in terms of competition, said Jia Zhijie Tuesday in his report to the Standing Committee of the National People's Congress (NPC).

Jia is the vice-director of the NPC's Financial and Economic Committee, which has been drafting the new bankruptcy law since 1994.

Besides the draft bankruptcy law, issues concerning agriculture, the countryside and farmers are also drawing great attention from legislators participating in the 10th NPC's Standing Committee latest session, which began Tuesday.

They will review reports on implementation of the land management law, the government's favorable agricultural policies and financial aid for farmers during their five-day session.

The lawmakers will also hold a second round of deliberations on the draft law on promoting agricultural mechanization, draft amendments to the Law on Contagious Diseases Prevention and Control, and a draft law on online signatures.

China's current Bankruptcy Law was promulgated in 1986 for trial implementation when the country's economic reform effort was still in its infancy.

Widely regarded as outdated, the law fails to give sufficient protection to creditors and only touches upon state-owned enterprises (SOE).

Bankruptcy for non-SOEs is stipulated in the Civil Procedure Law, Company Law and Measures on Liquidation Procedures for Foreign Investment Enterprises, each contains some articles in relation to insolvency without going into much detail.

Analysts say the new bill will integrate the country's inconsistent bankruptcy legislation and give the same floor to the nearly 8 million enterprises nationwide.

However, the draft gives an exception to around 2,000 SOEs underlined by the State Council, in line with the previous administrative closure measures.

These money-losing SOEs are the last group to go bankrupt with government bail-outs and the work will be finished in the next three to five years, an official with the State-Owned Assets Supervision and Administration Commission of  under the State Council said Tuesday.

Except the 2,000 SOEs that are mainly military and mining factories, 8 million companies in across the country will be required to follow a unified corporate bankruptcy law if firms go under, an official who declined to be named said.

It means that China's more than 100,000 remaining SOEs will become "equal competitors" in the market economy rather than being sheltered by the government, said Li Shuguang a drafter of the bill and vice-president of the Postgraduate School of the China University of Politics and Law, adding that "the landscape of a market economy is more clear in China."

Statistics show that by April 2004, China had closed 3,377 insolvent SOEs through adminis-trative intervention, allocated 49.3 billion yuan (US$6 billion) as SOE bankruptcy subsidies and allowed State-owned banks to write off a total of 223.8 billion yuan (US$27 billion) in bad loans caused by SOEs bankruptcies.

The legislators are also expected to ratify a consular agreement between China and New Zealand, protocol on revising the Shanghai Convention on Combating Terrorism, Separatism and Extremism signed on June 15, 2001 in Shanghai, protocol on revising the Shanghai Co-operation Organization (SCO) Charter, and protocol on revising the agreement on the establishment of a regional anti-terrorism agency, agreed to by SCO member countries on June 7, 2002 in St. Petersburg.

Other major items to be reviewed or awaiting ratification at the meeting include the Stockholm Convention on Persistent Organic Pollutants and the Beibu Gulf demarcation agreement between China and Viet Nam, as well as State Council reports on last year's final accounting of revenue and expenditures and the use of the central budget for 2003.

(China Daily June 22, 2004)