Private Company

In the course of the development of the PRC, private enterprises became more and more important. This started with the acceptance of private enterprises after the reforms and opening up of the country and eventually led to state promotion of the private sector. Private enterprises are now present in all industries with only a few exceptions. The private sector’s success is partly due to networks and interconnectedness with the government. The Chinese start-up scene as part of the private sector is particularly dynamic. For years, it has been massively promoted by political programs and guidelines as well as private and state funding instruments, so it now represents a serious competitor for Silicon Valley. Nevertheless, the scene is also characterized by inefficiencies, for example in the distribution of financial resources and the transformation of technology into market-ready products. With the development of private enterprises and an increasing number of business start-ups, there was a need for bankruptcy law. Although the bankruptcy law is comparable to the corresponding laws of Western countries, it is rarely applied. The dissolution of enterprises under the Enterprise Law is still the preferred option.