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China Launches Pilot Program to Force Exit of 'Zombie Companies' in Seven Economic Hubs
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Business·4/29/2026AI summary

China Launches Pilot Program to Force Exit of 'Zombie Companies' in Seven Economic Hubs

China's State Administration for Market Regulation announced a pilot program in seven regions (Beijing, Hebei, Jiangsu, Zhejiang, Henan, Sichuan, Guangdong) to force the exit of unprofitable zombie companies. Under a Company Law amendment, regulators can petition courts for compulsory liquidation of firms that fail to wind up voluntarily. Experts say the initiative will likely clear smaller dormant private firms but will have limited impact on larger state-linked zombies supported by local governments and banks.

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