“One country, two systems” – insolvency administration in the People’s Republic of China

The Asian financial turmoil has resulted in widespread corporate difficulties and collapses in the Asia‐Pacific region. There is an urgent need of corporate recovery and insolvency administration in the area. This paper aims at reviewing and analysing the insolvency law and practices in the Chinese mainland and Hong Kong of the People’s Republic of China (PRC). Foreign investors should possess the above knowledge in order to better protect themselves with their investments in the PRC. It is also envisaged that with improvement in corporate recovery procedures and reforms in insolvency administration, the PRC can pursue its economic performance further in the twenty‐first century with its accession to the World Trade Organisation.