Evergrande is bankrupt – that much has been clear for months. Still, a formal bankruptcy of the real estate group is not in sight. In Germany, the company would long have been charged with bankruptcy fraud. In China, however, companies have enough room to delay the inevitable. Elske Fehl-Weileder, an expert in Chinese bankruptcy law, explains in an interview with Christian Domke Seidel what lies behind this strategy and why bankruptcy can also be an opportunity for a fresh start in China.
German cities were plastered with posters of Shen Yun in recent weeks. This week, the ensemble will perform in Berlin. Fabian Peltsch analyzes that this is not folklore from the People’s Republic. Because the dance show Shen Yun is closely linked to the Falun Gong movement. And it has what Beijing longs for: cultural soft power.
Today’s profile is all about Germany’s diplomatic power. We introduce you to Patricia Flor, Germany’s next ambassador to Beijing. It is not yet clear when Flor will take up the position – and the German Foreign Office has yet to make an official announcement on the appointment. And all this despite the fact that it is already an open secret in both Beijing and Berlin.
Share trading was suspended and the annual financial statement was postponed. At subsidiaries, fixed amounts worth billions disappear and assets are frozen. Time and again, the group misses interest and loan repayments. In Germany, the managers of the Evergrande Group would probably have long since been charged with bankruptcy fraud for such tactics. In China, however, things are different. Here, companies have plenty of options to delay the inevitable. In an interview with China.Table, Elske Fehl-Weileder provides insight into business law of the People’s Republic. Fehl-Weileder works in the International Insolvency Administration at Schultze & Braun and is an expert on Chinese bankruptcy law. She explains why there has not yet been a successful bankruptcy petition filed by international creditors against the Evergrande Group.
According to our European definition, Evergrande has been bankrupt for a long time. Why hasn’t the group been forced to file for bankruptcy yet?
In China, the company’s management is not legally obliged to file for bankruptcy in the event of over-indebtedness or inability to pay. This means that overindebtedness or inability to pay do not have any direct consequences for Chinese companies and the persons acting on their behalf. In Germany, the situation is different: Here, a CEO – as of May 1, 2021, the so-called obligation to file for insolvency fully applies again after the Covid-related suspension – is obliged to file for bankruptcy if his company is overindebted or inability to pay has occurred. Should a CEO violate this obligation, he or she is liable to prosecution and may be held personally financially accountable – in other words, bankruptcy fraud.
What are the consequences?
The lack of a filing obligation is one reason why the number of bankruptcy proceedings in China is extremely low in relation to the overall number of companies. In addition, in China, bankruptcy is generally perceived as a failure and therefore a bankruptcy petition is often not filed. This makes the situation very difficult for foreign companies, but also for Chinese business partners of Chinese companies, as Chinese companies often exit the market without an orderly bankruptcy process. However, I think this is very unlikely for a company the size of China Evergrande.
At what point can bankruptcy no longer be postponed in China?
If the deferral for an interest payment has expired and no payment has been made, the outstanding amount must be included in the bankruptcy calculation as a debt due. As a general rule, if a company’s liquid assets are not sufficient to cover the accounts payable, the company is bankrupt. This is then a so-called bankruptcy cause. The exact point in time at which insolvency occurs can be calculated to the day for every company in the world. In China, however, the effective date is less relevant than in Germany because, as already mentioned, there is no obligation to file for bankruptcy there.
How would it work in Germany?
In Germany, a maximum period of three weeks begins from the effective date – the bankruptcy occurrence – within which the management must eliminate the cause of the bankruptcy. If this is unsuccessful, the CEO must file for bankruptcy. In China, as already mentioned, this obligation does not exist. Postponing the presentation of the annual financial statements does not make any difference either. Although it represents a breach of stock exchange regulations, it does not per se provide grounds for filing for bankruptcy – neither in China nor in Germany.
Against this backdrop, it is reasonable to assume that those responsible at China Evergrande will continue their restructuring efforts – in January, after all, the Group informed its creditors that a preliminary restructuring plan is to be presented within the next six months – until an agreement is reached with the creditors or a creditor files for bankruptcy against China Evergrande. Or to put it another way: Since neither the company itself nor a creditor has to file for bankruptcy, the final option in China is to refrain from legal bankruptcy proceedings despite the fact that the company is factually bankrupt and either try to restructure the company or disorderly exit the market.
What options does a European creditor have to file for bankruptcy in China?
First, it is essential to have a due receivable from the Chinese company that the bankruptcy petition is filed against – and, as in the case of China Evergrande, this may well be an interest payment on a bond. Only then can a creditor file for bankruptcy against the company. The general rule is that the relevant bankruptcy court must hear such an application from a third party or creditor.
However, the hurdles for such an application should not be underestimated. For example, the application must be submitted to the court in Chinese and substantiated with supporting documents. This could be, for example, proof that payment of the outstanding debt was due by a certain date. It is also good if the creditor can provide proof that a reminder has been sent for the outstanding receivable. Another important factor is that the creditor must file the bankruptcy petition with the court that has jurisdiction over the respective company. However, with a group the size of China Evergrande, this is not easy to find out.
Assuming a creditor clears all the hurdles to file for bankruptcy against China Evergrande, what happens next and how long does it take?
If it is clear that the court has jurisdiction and if it has received the application and relevant evidence, the court decides whether to accept the bankruptcy petition for processing. If it rejects the application – for example, because the court considers the evidence to be insufficient – the creditor has ten days to appeal to the next higher court. If the court accepts the creditor’s bankruptcy petition, China Evergrande is given the opportunity to submit a statement.
If China Evergrande waives this right, or is unable to prove that there is no bankruptcy cause, one or more bankruptcy administrators will be appointed. Creditors can then submit their claims to the claims register Creditors who are successful in their bankruptcy applications are granted information rights in the proceedings. Since there have been no reports to date of a successful bankruptcy petition filed by a creditor against China Evergrande 0 and in my view, this would already be the case simply because of the size of China Evergrande – I assume that no such petition has been filed or that it has not led to legal bankruptcy proceedings.
Bankruptcy probably doesn’t mean the company disappears, even in China. What are the options afterward to keep the business going and not plunge the world into a financial crisis?
In Germany and China, bankruptcy does not automatically mean that the bankrupt company will be wound up. Rather, bankruptcy is an opportunity for a fresh start. A special characteristic in China is that – unlike in Germany – a creditor petition can also be aimed at a “restructuring” proceeding. For creditors, the restructuring of a company – i.e. its preservation, for example through a sale of assets – is even more financially lucrative than liquidation. This is because the so-called bankruptcy estate is then larger, from which the approved receivables of the creditors will be settled.
In the event of bankruptcy, creditors can file their claims in what is known as the claims register. This means that at the end of the proceedings, they will be paid back a proportionate share of their claim from the assets that the bankruptcy trustee was able to collect. In China, however, it is quite time-consuming for a foreign creditor in particular to file his claim, as he has to submit the necessary documents in Chinese. The fact that the so-called bankruptcy quota is usually only in the single digits even when the assets of a company are sold also plays a role here.
What special rules apply here in China?
For bankruptcy proceedings in China, it should be noted that apart from legal costs and secured creditors – usually banks, for example – the claims of employees also have to be settled before other creditors, which means that the quota may be even lower as a result. For China Evergrande’s creditors, it is and will remain likely that they will lose money. However, they must ask themselves how much influence they want to have over the restructuring of China Evergrande and whether they are prepared to face the hurdles and costs that undoubtedly exist for filing for bankruptcy against the company.
“China before Communism” is the subtitle of the Shen Yun show spectacle, which will be performed in Berlin on March 29-31. The many posters feature a dancer in a Hanfu dress jumping into the picture, her wide sleeves stretched out like two wings. Shen Yun combines acrobatics and music with traditional Chinese elements. But the 80-member ensemble is far from being a Chinese state circus. Behind Shen Yun is Falun Gong, a spiritual movement also known as Falun Dafa, which is banned in China. Its members have banded together in exile to form a powerful voice against Beijing. The title of the event should also be understood in this context: For the creators of Shen Yun, China’s 5,000-year civilization ended when the Communists took power.
Yet Falun Gong and the Chinese Communist Party were not always enemies. When their techniques for strengthening body and mind became known in the mid-1990s, they were initially welcomed by the Party as a practice for improving public health. High cadres and entire police units sought personal treatment from Falun Gong founder Li Hongzhi. The movement could not be attributed to “foreign forces”. Symbols, terminology and techniques draw on Buddhism, Taoism and traditional qigong.
With its religious and moral leanings, Falun Gong provided a foothold for many Chinese who were overwhelmed by the changes of reform and opening-up policies. At its peak, the movement was believed to have attracted between 70 and 100 million Chinese – more than the Communist Party in China had members. For Beijing, the movement had reached critical mass, especially since the efficiently structured organization did not shy away from protests. On April 25, 1999, 10,000 supporters protested in front of the seat of government in Beijing over critical reporting in some state media. Then, on July 22, 1999, China’s government banned Falun Gong on the grounds that it was an “evil cult” and a “criminal sect”. Hundreds of thousands of followers escaped arrest and torture by following Li Hongzhi into exile.
Especially in the United States, the organization lived on as a mass movement. It also developed into an anti-communist mouthpiece. Falun Gong practitioners launched multilingual news media including the newspaper Epoch Times, which is published in 36 countries, and the New Tang Dynasty Television (NTD) cable channel, which reportedly employs correspondents in 70 cities around the world. The unofficial headquarters of Falun Gong is located in the state of New York. It is also where the Shen Yun Performing Arts group was founded in 2006. Shen Yun has what Beijing wishes it had: cultural soft power. The show, performed worldwide by some 400 dancers, regularly delivers sold-out performances in prestigious concert halls around the world. This year, the show will tour 81 cities on four continents.
Shen Yun’s success is also due to its massive advertising budget. The event’s banners are so omnipresent on the Internet and in urban areas that they have even become Internet memes. A well-known one is “new image from mars rover“: Vast plains of reddish-brown sand, and in the center, as the only fixed point on the horizon, a poster of Shen Yun. The budget partly comes from ticket prices, which vary depending on the city and venue, but usually hit the 100-euro mark. At the Deutsche Oper in Berlin, prices range from 72 to 152 euros for events at the end of March.
In addition, many volunteers from local Falun Dafa groups help Shen Yun to keep expenses low. In 2016, the latest available numbers, Shen Yun generated revenues of $22.5 million, while expenses were only around $7.3 million. The fact that Shen Yun belongs to Falun Gong is only subtly hinted at. At first glance, the dance company’s performance is supposed to represent Chinese culture. However, individual scenes quite obviously depict repression against Falun Gong followers: Persons clad in black robes with a hammer and sickle on their backs beat down meditating women to the sound of drums. A huge tsunami wave with the likeness of Karl Marx is also said to have been part of the show.
Chinese foreign missions attempt to boycott the supposed Chinese cultural export. The German Federal Office for the Protection of the Constitution already reported in 2008 that the Chinese Consulate General in Munich allegedly tried to prevent a German tour of Shen Yun by threatening the German organizer with consequences. The historically rather freely interpreted musical is clearly not a cultural performance, “is not a cultural performance at all but a political tool of ‘Falun Gong’ to preach cult messages, spread anti-China propaganda, increase its own influence and raise funds,” the Chinese Embassy to the United States explains on its website.
An easy target for criticism is Falun Gong founder Li Hongzhi, who has been living in the USA since 1998 and has attracted attention with questionable statements. In an interview with Time magazine, Li spoke of extraterrestrials who want to become masters of humanity with the help of scientific experiments. Elsewhere, he declared that souls in the afterlife would be separated by skin color and that homosexuality and atheism were scourges of modernity. Although many disciples may share his crude views, Li apparently no longer plays a role as a visible leader of Falun Gong. The 70-year-old lives in seclusion and communicates almost exclusively through posts on Falun Gong websites.
In Chinese history, rulers were constantly threatened by spiritual secret societies, such as the Taiping Rebellion under the Christian Hong Xiuquan, which captured Nanjing in the 19th century and declared the city the Heavenly Capital. But these and other popular movements, like Falun Gong, never managed to establish themselves permanently beyond the country’s borders. China’s then head of state Jiang Zemin originally wanted to eliminate Falun Gong within 100 days in the 1990s. This plan went completely wrong. By banning it at home, China’s government has created a global adversary that it won’t be able to get rid of anytime soon.
Patricia Flor’s career has taken her to all corners of the earth. And now it’s clear what her next stop will be: The top diplomat will become German ambassador to Beijing. Flor can draw on years of experience in German and European diplomacy. Her posts in Japan and responsibility for the Indo-Pacific have taken her to important neighboring regions of China.
A good ten years ago, when a common EU foreign policy was far less present than it is today, Flor joined the European External Action Service (EEAS): “I was a convinced German diplomat. But I believe that we will only have an influence on a global scale if we act as the EU. When it comes to who sits at the table with the other big players, the EU will increasingly be a part,” Flor told Deutschlandfunk radio at the time.
Flor remained loyal to EU foreign policy – with a few stints in German diplomacy in between. As the current EU ambassador to Japan, the 60-year-old is considered reliable within the EEAS and popular with EU Foreign Affairs Commissioner Josep Borrell. Berlin apparently already had a greater interest in Flor’s service to the Federal Republic after the change of government. Flor, who is considered close to the Greens, was at times also considered as a new Minister of State in the Foreign Ministry. She already has work experience under former Green Foreign Minister Joschka Fischer.
Instead of diplomacy in Berlin, however, foreign lands now call for the Bavarian-born journalist, who took her first career steps in a completely different profession: After graduating from high school and completing a traineeship at the Nuremberg News, she worked as an editor and freelance journalist in the United States. She studied history, philosophy, Slavic studies and Eastern European history in Bamberg and Erlangen.
In 1992, she joined the German Foreign Office and was posted to the German Embassy in Kazakhstan. In 1995, Flor received her doctorate in Eastern European history and economics after research stays in the United Kingdom and Russia. In 1996, she joined the German Permanent Mission to the United Nations in New York, where she served as Chair of the UN Commission on Women’s Rights from 1998 to 2000. She maintained her commitment to women and feminist diplomacy at other career stages: “During all my postings I have
always promoted the cause of women,” Flor said at an event.
The list of Flor’s posts so far is long. Her assignments brought her back to the German capital time and again. Under Joschka Fischer, Flor was the Head of the Parliamentary and Cabinet Department at the Federal Foreign Office from 2002 to 2006, before becoming German Ambassador to Georgia. From March 2010, she returned to the Federal Foreign Office as Commissioner for Eastern Europe, the Caucasus and Central Asia. She maintained her focus on China’s important neighboring region when she made the switch to the EU level for the first time in 2012 and became the European Union’s Special Representative for Central Asia.
Just over a year later, China presented its “Belt and Road” initiative for the first time, in which Central Asia plays an important role for Beijing. At that time, Flor was already campaigning for closer cooperation between the EU and local states. There is no lack of interest in cooperation in Central Asia, despite close ties with China and especially Russia, Flor said in an interview.
In 2014, Flor returned from Brussels to Berlin once again. Under SPD Foreign Minister Frank-Walter Steinmeier, she became Head of the Department for the United Nations at the Federal Foreign Office. She then headed the expanded department for International Order, United Nations and Arms Control and was the Federal Government Commissioner for Disarmament and Arms Control.
After four years in the German capital, she was once again moved abroad: Flor has been the European Union’s ambassador to Japan since mid-2018. In this position, she promotes, among other things, closer cooperation between the EU and the Indo-Pacific region. Brussels’ plans for an increased military presence in the Indo-Pacific region, which includes the deployment of ships, regularly upset the People’s Republic. As Germany’s new ambassador, Flor will now have to defend these European plans in Beijing. Amelie Richter
The fact that foreign companies invest a lot of effort and brainpower in translating their brand names into Chinese has been widely discussed. The result is sometimes rather colorful creations like “Precious Horse” (宝马 Bǎomǎ – BMW), “Gateway to the West” (西门子 Xīménzǐ – Siemens) or “Sparrow’s Nest” (雀巢 Quècháo – Nestlé). But how did well-known Chinese platforms like Taobao, Douyin, Baidu actually get their names? A look behind the linguistic curtain offers some surprises. Let’s go!
Baidu: China’s number one search engine literally means “a hundred times” or “countless times” (百度 bǎi dù). Fortunately, this does not mean that you have to search a hundred times before you find something. Rather, it is an allusion to a classic story of seeking and finding, immortalized in the song-poem 青玉案-元夕 Qīng yù àn – yuánxī (“Green Jade Table – Lantern Festival”) by Xin Qiji (辛弃疾 Xīn Qìjí). In it, a famous verse reads: “After searching a hundred times in the crowd, suddenly turning around, he saw her in the faintest candlelight” (众里寻他千百度, 蓦然回首, 那人却在灯火阑珊处). Baidu thus sees itself as a gateway to happiness. Search tool algorithms can be so poetic.
Taobao: Treasure hunters are out and about on China’s largest online shopping marketplace! “Taobao” is made up of the characters 淘 táo “to dredge out” (as in 淘金 táojīn “to pan for gold” or 淘米 táomǐ “to wash out rice”) and 宝 bǎo “treasure, valuables”. The name creation is also an allusion to the colloquial phrases 淘便宜货 táo piányihuò “bargain hunting” and 淘宝贝 táo bǎobèi “fishing for precious shopping catches.”
Alibaba: Is it really wise to name an e-commerce group after “Ali Baba and the Forty Thieves”? This is what one might ask in the case of Taobao parent company Alibaba (阿里巴巴 Alǐbābā). However, company founder Jack Ma can give a very plausible explanation for the unusual name choice. The idea came about while brainstorming in a café in San Francisco, the former English teacher explained in an interview with CNN in 2006. He asked the waitress what she associated with “Alibaba”. “Open Sesame!” she spontaneously replied. That made everything clear to Ma. After all, with “Alibaba” he wanted to open up the sesame seeds of opportunity for small traders and medium-sized businesses in China. However, the company founder abandoned the idea of calling today’s Taobao simply “Alimama” in reference to Alibaba.
Jingdong: JD.com – one of Alibaba’s fiercest competitors – can do without English phonetic digressions. What at first glance appears to be an unspectacular combination of characters from 京 jīng “capital” and 东 dōng “east” actually has a personal touch. According to Jingdong CEO Richard Liu (aka 刘强东 Liú Qiángdōng), there was a human touch to the naming ceremony: The company boss revealed to Chinese media that it was a combination of the first names of himself and his first love. He simply merged the last syllables of the two first names. The fact that the CEO contributed 东 dōng, a character that can also mean “owner” (which theoretically also allows the interpretation “owner of Jing”), was probably not on Liu’s mind in pre-me-too times. Let’s hope that there are no false interpretations.
Douyin: Nothing was left to chance in the case of Douyin, the Chinese version of TikTok. Before the launch, the app’s creators are said to have tested several names in an image study. In the end, 抖 音 dǒuyīn (literally “shaking sounds“) sparked the greatest interest among the potential target group. Perhaps also because the combination of the characters 抖 dǒu “shake, shiver, twitch” and 音 yīn “sound, sonic” reminded the beat-loving clientele of the inevitable twitching, bobbing, and nodding that infects the entire body when melodic sounds massage the ear canals.
Weixin: The name of the most famous social media app in the Middle Kingdom is less cryptic. 微信 Wēixìn – known internationally as “WeChat” – simply means “micro-message” (from 微 wēi “tiny, small, micro-” plus 信 xìn “letter, message, information”). The name hints at the application’s beginnings when it was primarily considered a messenger service. Another major player in the social network arena also has a “micro” in its name, the microblog portal Weibo (微博 Wēibó), a combination of 微 wēi and 博客 bókè for blog.
Douban: And, last but not least, there’s the “broad bean leaf” (豆瓣 Dòubàn), the go-to place for Chinese hipsters, film and music fans, and all bookworms. On the online platform, users not only rate movies, books and music, but also gather in a colorful mix of interest communities and fan groups. What does this have to do with beans? Well, nothing actually. The portal owes its unusual name simply to the fact that founder Yang Bo (杨勃 Yáng Bó) once wrote the website’s first program code in a Beijing Starbucks branch near a hutong alley called豆瓣胡同 (dòubàn hútòng). Die-hard Douban fans therefore still make a pilgrimage to the alley in the heart of the capital for souvenir shots.
Verena Menzel runs the language school New Chinese in Beijing.
Evergrande is bankrupt – that much has been clear for months. Still, a formal bankruptcy of the real estate group is not in sight. In Germany, the company would long have been charged with bankruptcy fraud. In China, however, companies have enough room to delay the inevitable. Elske Fehl-Weileder, an expert in Chinese bankruptcy law, explains in an interview with Christian Domke Seidel what lies behind this strategy and why bankruptcy can also be an opportunity for a fresh start in China.
German cities were plastered with posters of Shen Yun in recent weeks. This week, the ensemble will perform in Berlin. Fabian Peltsch analyzes that this is not folklore from the People’s Republic. Because the dance show Shen Yun is closely linked to the Falun Gong movement. And it has what Beijing longs for: cultural soft power.
Today’s profile is all about Germany’s diplomatic power. We introduce you to Patricia Flor, Germany’s next ambassador to Beijing. It is not yet clear when Flor will take up the position – and the German Foreign Office has yet to make an official announcement on the appointment. And all this despite the fact that it is already an open secret in both Beijing and Berlin.
Share trading was suspended and the annual financial statement was postponed. At subsidiaries, fixed amounts worth billions disappear and assets are frozen. Time and again, the group misses interest and loan repayments. In Germany, the managers of the Evergrande Group would probably have long since been charged with bankruptcy fraud for such tactics. In China, however, things are different. Here, companies have plenty of options to delay the inevitable. In an interview with China.Table, Elske Fehl-Weileder provides insight into business law of the People’s Republic. Fehl-Weileder works in the International Insolvency Administration at Schultze & Braun and is an expert on Chinese bankruptcy law. She explains why there has not yet been a successful bankruptcy petition filed by international creditors against the Evergrande Group.
According to our European definition, Evergrande has been bankrupt for a long time. Why hasn’t the group been forced to file for bankruptcy yet?
In China, the company’s management is not legally obliged to file for bankruptcy in the event of over-indebtedness or inability to pay. This means that overindebtedness or inability to pay do not have any direct consequences for Chinese companies and the persons acting on their behalf. In Germany, the situation is different: Here, a CEO – as of May 1, 2021, the so-called obligation to file for insolvency fully applies again after the Covid-related suspension – is obliged to file for bankruptcy if his company is overindebted or inability to pay has occurred. Should a CEO violate this obligation, he or she is liable to prosecution and may be held personally financially accountable – in other words, bankruptcy fraud.
What are the consequences?
The lack of a filing obligation is one reason why the number of bankruptcy proceedings in China is extremely low in relation to the overall number of companies. In addition, in China, bankruptcy is generally perceived as a failure and therefore a bankruptcy petition is often not filed. This makes the situation very difficult for foreign companies, but also for Chinese business partners of Chinese companies, as Chinese companies often exit the market without an orderly bankruptcy process. However, I think this is very unlikely for a company the size of China Evergrande.
At what point can bankruptcy no longer be postponed in China?
If the deferral for an interest payment has expired and no payment has been made, the outstanding amount must be included in the bankruptcy calculation as a debt due. As a general rule, if a company’s liquid assets are not sufficient to cover the accounts payable, the company is bankrupt. This is then a so-called bankruptcy cause. The exact point in time at which insolvency occurs can be calculated to the day for every company in the world. In China, however, the effective date is less relevant than in Germany because, as already mentioned, there is no obligation to file for bankruptcy there.
How would it work in Germany?
In Germany, a maximum period of three weeks begins from the effective date – the bankruptcy occurrence – within which the management must eliminate the cause of the bankruptcy. If this is unsuccessful, the CEO must file for bankruptcy. In China, as already mentioned, this obligation does not exist. Postponing the presentation of the annual financial statements does not make any difference either. Although it represents a breach of stock exchange regulations, it does not per se provide grounds for filing for bankruptcy – neither in China nor in Germany.
Against this backdrop, it is reasonable to assume that those responsible at China Evergrande will continue their restructuring efforts – in January, after all, the Group informed its creditors that a preliminary restructuring plan is to be presented within the next six months – until an agreement is reached with the creditors or a creditor files for bankruptcy against China Evergrande. Or to put it another way: Since neither the company itself nor a creditor has to file for bankruptcy, the final option in China is to refrain from legal bankruptcy proceedings despite the fact that the company is factually bankrupt and either try to restructure the company or disorderly exit the market.
What options does a European creditor have to file for bankruptcy in China?
First, it is essential to have a due receivable from the Chinese company that the bankruptcy petition is filed against – and, as in the case of China Evergrande, this may well be an interest payment on a bond. Only then can a creditor file for bankruptcy against the company. The general rule is that the relevant bankruptcy court must hear such an application from a third party or creditor.
However, the hurdles for such an application should not be underestimated. For example, the application must be submitted to the court in Chinese and substantiated with supporting documents. This could be, for example, proof that payment of the outstanding debt was due by a certain date. It is also good if the creditor can provide proof that a reminder has been sent for the outstanding receivable. Another important factor is that the creditor must file the bankruptcy petition with the court that has jurisdiction over the respective company. However, with a group the size of China Evergrande, this is not easy to find out.
Assuming a creditor clears all the hurdles to file for bankruptcy against China Evergrande, what happens next and how long does it take?
If it is clear that the court has jurisdiction and if it has received the application and relevant evidence, the court decides whether to accept the bankruptcy petition for processing. If it rejects the application – for example, because the court considers the evidence to be insufficient – the creditor has ten days to appeal to the next higher court. If the court accepts the creditor’s bankruptcy petition, China Evergrande is given the opportunity to submit a statement.
If China Evergrande waives this right, or is unable to prove that there is no bankruptcy cause, one or more bankruptcy administrators will be appointed. Creditors can then submit their claims to the claims register Creditors who are successful in their bankruptcy applications are granted information rights in the proceedings. Since there have been no reports to date of a successful bankruptcy petition filed by a creditor against China Evergrande 0 and in my view, this would already be the case simply because of the size of China Evergrande – I assume that no such petition has been filed or that it has not led to legal bankruptcy proceedings.
Bankruptcy probably doesn’t mean the company disappears, even in China. What are the options afterward to keep the business going and not plunge the world into a financial crisis?
In Germany and China, bankruptcy does not automatically mean that the bankrupt company will be wound up. Rather, bankruptcy is an opportunity for a fresh start. A special characteristic in China is that – unlike in Germany – a creditor petition can also be aimed at a “restructuring” proceeding. For creditors, the restructuring of a company – i.e. its preservation, for example through a sale of assets – is even more financially lucrative than liquidation. This is because the so-called bankruptcy estate is then larger, from which the approved receivables of the creditors will be settled.
In the event of bankruptcy, creditors can file their claims in what is known as the claims register. This means that at the end of the proceedings, they will be paid back a proportionate share of their claim from the assets that the bankruptcy trustee was able to collect. In China, however, it is quite time-consuming for a foreign creditor in particular to file his claim, as he has to submit the necessary documents in Chinese. The fact that the so-called bankruptcy quota is usually only in the single digits even when the assets of a company are sold also plays a role here.
What special rules apply here in China?
For bankruptcy proceedings in China, it should be noted that apart from legal costs and secured creditors – usually banks, for example – the claims of employees also have to be settled before other creditors, which means that the quota may be even lower as a result. For China Evergrande’s creditors, it is and will remain likely that they will lose money. However, they must ask themselves how much influence they want to have over the restructuring of China Evergrande and whether they are prepared to face the hurdles and costs that undoubtedly exist for filing for bankruptcy against the company.
“China before Communism” is the subtitle of the Shen Yun show spectacle, which will be performed in Berlin on March 29-31. The many posters feature a dancer in a Hanfu dress jumping into the picture, her wide sleeves stretched out like two wings. Shen Yun combines acrobatics and music with traditional Chinese elements. But the 80-member ensemble is far from being a Chinese state circus. Behind Shen Yun is Falun Gong, a spiritual movement also known as Falun Dafa, which is banned in China. Its members have banded together in exile to form a powerful voice against Beijing. The title of the event should also be understood in this context: For the creators of Shen Yun, China’s 5,000-year civilization ended when the Communists took power.
Yet Falun Gong and the Chinese Communist Party were not always enemies. When their techniques for strengthening body and mind became known in the mid-1990s, they were initially welcomed by the Party as a practice for improving public health. High cadres and entire police units sought personal treatment from Falun Gong founder Li Hongzhi. The movement could not be attributed to “foreign forces”. Symbols, terminology and techniques draw on Buddhism, Taoism and traditional qigong.
With its religious and moral leanings, Falun Gong provided a foothold for many Chinese who were overwhelmed by the changes of reform and opening-up policies. At its peak, the movement was believed to have attracted between 70 and 100 million Chinese – more than the Communist Party in China had members. For Beijing, the movement had reached critical mass, especially since the efficiently structured organization did not shy away from protests. On April 25, 1999, 10,000 supporters protested in front of the seat of government in Beijing over critical reporting in some state media. Then, on July 22, 1999, China’s government banned Falun Gong on the grounds that it was an “evil cult” and a “criminal sect”. Hundreds of thousands of followers escaped arrest and torture by following Li Hongzhi into exile.
Especially in the United States, the organization lived on as a mass movement. It also developed into an anti-communist mouthpiece. Falun Gong practitioners launched multilingual news media including the newspaper Epoch Times, which is published in 36 countries, and the New Tang Dynasty Television (NTD) cable channel, which reportedly employs correspondents in 70 cities around the world. The unofficial headquarters of Falun Gong is located in the state of New York. It is also where the Shen Yun Performing Arts group was founded in 2006. Shen Yun has what Beijing wishes it had: cultural soft power. The show, performed worldwide by some 400 dancers, regularly delivers sold-out performances in prestigious concert halls around the world. This year, the show will tour 81 cities on four continents.
Shen Yun’s success is also due to its massive advertising budget. The event’s banners are so omnipresent on the Internet and in urban areas that they have even become Internet memes. A well-known one is “new image from mars rover“: Vast plains of reddish-brown sand, and in the center, as the only fixed point on the horizon, a poster of Shen Yun. The budget partly comes from ticket prices, which vary depending on the city and venue, but usually hit the 100-euro mark. At the Deutsche Oper in Berlin, prices range from 72 to 152 euros for events at the end of March.
In addition, many volunteers from local Falun Dafa groups help Shen Yun to keep expenses low. In 2016, the latest available numbers, Shen Yun generated revenues of $22.5 million, while expenses were only around $7.3 million. The fact that Shen Yun belongs to Falun Gong is only subtly hinted at. At first glance, the dance company’s performance is supposed to represent Chinese culture. However, individual scenes quite obviously depict repression against Falun Gong followers: Persons clad in black robes with a hammer and sickle on their backs beat down meditating women to the sound of drums. A huge tsunami wave with the likeness of Karl Marx is also said to have been part of the show.
Chinese foreign missions attempt to boycott the supposed Chinese cultural export. The German Federal Office for the Protection of the Constitution already reported in 2008 that the Chinese Consulate General in Munich allegedly tried to prevent a German tour of Shen Yun by threatening the German organizer with consequences. The historically rather freely interpreted musical is clearly not a cultural performance, “is not a cultural performance at all but a political tool of ‘Falun Gong’ to preach cult messages, spread anti-China propaganda, increase its own influence and raise funds,” the Chinese Embassy to the United States explains on its website.
An easy target for criticism is Falun Gong founder Li Hongzhi, who has been living in the USA since 1998 and has attracted attention with questionable statements. In an interview with Time magazine, Li spoke of extraterrestrials who want to become masters of humanity with the help of scientific experiments. Elsewhere, he declared that souls in the afterlife would be separated by skin color and that homosexuality and atheism were scourges of modernity. Although many disciples may share his crude views, Li apparently no longer plays a role as a visible leader of Falun Gong. The 70-year-old lives in seclusion and communicates almost exclusively through posts on Falun Gong websites.
In Chinese history, rulers were constantly threatened by spiritual secret societies, such as the Taiping Rebellion under the Christian Hong Xiuquan, which captured Nanjing in the 19th century and declared the city the Heavenly Capital. But these and other popular movements, like Falun Gong, never managed to establish themselves permanently beyond the country’s borders. China’s then head of state Jiang Zemin originally wanted to eliminate Falun Gong within 100 days in the 1990s. This plan went completely wrong. By banning it at home, China’s government has created a global adversary that it won’t be able to get rid of anytime soon.
Patricia Flor’s career has taken her to all corners of the earth. And now it’s clear what her next stop will be: The top diplomat will become German ambassador to Beijing. Flor can draw on years of experience in German and European diplomacy. Her posts in Japan and responsibility for the Indo-Pacific have taken her to important neighboring regions of China.
A good ten years ago, when a common EU foreign policy was far less present than it is today, Flor joined the European External Action Service (EEAS): “I was a convinced German diplomat. But I believe that we will only have an influence on a global scale if we act as the EU. When it comes to who sits at the table with the other big players, the EU will increasingly be a part,” Flor told Deutschlandfunk radio at the time.
Flor remained loyal to EU foreign policy – with a few stints in German diplomacy in between. As the current EU ambassador to Japan, the 60-year-old is considered reliable within the EEAS and popular with EU Foreign Affairs Commissioner Josep Borrell. Berlin apparently already had a greater interest in Flor’s service to the Federal Republic after the change of government. Flor, who is considered close to the Greens, was at times also considered as a new Minister of State in the Foreign Ministry. She already has work experience under former Green Foreign Minister Joschka Fischer.
Instead of diplomacy in Berlin, however, foreign lands now call for the Bavarian-born journalist, who took her first career steps in a completely different profession: After graduating from high school and completing a traineeship at the Nuremberg News, she worked as an editor and freelance journalist in the United States. She studied history, philosophy, Slavic studies and Eastern European history in Bamberg and Erlangen.
In 1992, she joined the German Foreign Office and was posted to the German Embassy in Kazakhstan. In 1995, Flor received her doctorate in Eastern European history and economics after research stays in the United Kingdom and Russia. In 1996, she joined the German Permanent Mission to the United Nations in New York, where she served as Chair of the UN Commission on Women’s Rights from 1998 to 2000. She maintained her commitment to women and feminist diplomacy at other career stages: “During all my postings I have
always promoted the cause of women,” Flor said at an event.
The list of Flor’s posts so far is long. Her assignments brought her back to the German capital time and again. Under Joschka Fischer, Flor was the Head of the Parliamentary and Cabinet Department at the Federal Foreign Office from 2002 to 2006, before becoming German Ambassador to Georgia. From March 2010, she returned to the Federal Foreign Office as Commissioner for Eastern Europe, the Caucasus and Central Asia. She maintained her focus on China’s important neighboring region when she made the switch to the EU level for the first time in 2012 and became the European Union’s Special Representative for Central Asia.
Just over a year later, China presented its “Belt and Road” initiative for the first time, in which Central Asia plays an important role for Beijing. At that time, Flor was already campaigning for closer cooperation between the EU and local states. There is no lack of interest in cooperation in Central Asia, despite close ties with China and especially Russia, Flor said in an interview.
In 2014, Flor returned from Brussels to Berlin once again. Under SPD Foreign Minister Frank-Walter Steinmeier, she became Head of the Department for the United Nations at the Federal Foreign Office. She then headed the expanded department for International Order, United Nations and Arms Control and was the Federal Government Commissioner for Disarmament and Arms Control.
After four years in the German capital, she was once again moved abroad: Flor has been the European Union’s ambassador to Japan since mid-2018. In this position, she promotes, among other things, closer cooperation between the EU and the Indo-Pacific region. Brussels’ plans for an increased military presence in the Indo-Pacific region, which includes the deployment of ships, regularly upset the People’s Republic. As Germany’s new ambassador, Flor will now have to defend these European plans in Beijing. Amelie Richter
The fact that foreign companies invest a lot of effort and brainpower in translating their brand names into Chinese has been widely discussed. The result is sometimes rather colorful creations like “Precious Horse” (宝马 Bǎomǎ – BMW), “Gateway to the West” (西门子 Xīménzǐ – Siemens) or “Sparrow’s Nest” (雀巢 Quècháo – Nestlé). But how did well-known Chinese platforms like Taobao, Douyin, Baidu actually get their names? A look behind the linguistic curtain offers some surprises. Let’s go!
Baidu: China’s number one search engine literally means “a hundred times” or “countless times” (百度 bǎi dù). Fortunately, this does not mean that you have to search a hundred times before you find something. Rather, it is an allusion to a classic story of seeking and finding, immortalized in the song-poem 青玉案-元夕 Qīng yù àn – yuánxī (“Green Jade Table – Lantern Festival”) by Xin Qiji (辛弃疾 Xīn Qìjí). In it, a famous verse reads: “After searching a hundred times in the crowd, suddenly turning around, he saw her in the faintest candlelight” (众里寻他千百度, 蓦然回首, 那人却在灯火阑珊处). Baidu thus sees itself as a gateway to happiness. Search tool algorithms can be so poetic.
Taobao: Treasure hunters are out and about on China’s largest online shopping marketplace! “Taobao” is made up of the characters 淘 táo “to dredge out” (as in 淘金 táojīn “to pan for gold” or 淘米 táomǐ “to wash out rice”) and 宝 bǎo “treasure, valuables”. The name creation is also an allusion to the colloquial phrases 淘便宜货 táo piányihuò “bargain hunting” and 淘宝贝 táo bǎobèi “fishing for precious shopping catches.”
Alibaba: Is it really wise to name an e-commerce group after “Ali Baba and the Forty Thieves”? This is what one might ask in the case of Taobao parent company Alibaba (阿里巴巴 Alǐbābā). However, company founder Jack Ma can give a very plausible explanation for the unusual name choice. The idea came about while brainstorming in a café in San Francisco, the former English teacher explained in an interview with CNN in 2006. He asked the waitress what she associated with “Alibaba”. “Open Sesame!” she spontaneously replied. That made everything clear to Ma. After all, with “Alibaba” he wanted to open up the sesame seeds of opportunity for small traders and medium-sized businesses in China. However, the company founder abandoned the idea of calling today’s Taobao simply “Alimama” in reference to Alibaba.
Jingdong: JD.com – one of Alibaba’s fiercest competitors – can do without English phonetic digressions. What at first glance appears to be an unspectacular combination of characters from 京 jīng “capital” and 东 dōng “east” actually has a personal touch. According to Jingdong CEO Richard Liu (aka 刘强东 Liú Qiángdōng), there was a human touch to the naming ceremony: The company boss revealed to Chinese media that it was a combination of the first names of himself and his first love. He simply merged the last syllables of the two first names. The fact that the CEO contributed 东 dōng, a character that can also mean “owner” (which theoretically also allows the interpretation “owner of Jing”), was probably not on Liu’s mind in pre-me-too times. Let’s hope that there are no false interpretations.
Douyin: Nothing was left to chance in the case of Douyin, the Chinese version of TikTok. Before the launch, the app’s creators are said to have tested several names in an image study. In the end, 抖 音 dǒuyīn (literally “shaking sounds“) sparked the greatest interest among the potential target group. Perhaps also because the combination of the characters 抖 dǒu “shake, shiver, twitch” and 音 yīn “sound, sonic” reminded the beat-loving clientele of the inevitable twitching, bobbing, and nodding that infects the entire body when melodic sounds massage the ear canals.
Weixin: The name of the most famous social media app in the Middle Kingdom is less cryptic. 微信 Wēixìn – known internationally as “WeChat” – simply means “micro-message” (from 微 wēi “tiny, small, micro-” plus 信 xìn “letter, message, information”). The name hints at the application’s beginnings when it was primarily considered a messenger service. Another major player in the social network arena also has a “micro” in its name, the microblog portal Weibo (微博 Wēibó), a combination of 微 wēi and 博客 bókè for blog.
Douban: And, last but not least, there’s the “broad bean leaf” (豆瓣 Dòubàn), the go-to place for Chinese hipsters, film and music fans, and all bookworms. On the online platform, users not only rate movies, books and music, but also gather in a colorful mix of interest communities and fan groups. What does this have to do with beans? Well, nothing actually. The portal owes its unusual name simply to the fact that founder Yang Bo (杨勃 Yáng Bó) once wrote the website’s first program code in a Beijing Starbucks branch near a hutong alley called豆瓣胡同 (dòubàn hútòng). Die-hard Douban fans therefore still make a pilgrimage to the alley in the heart of the capital for souvenir shots.
Verena Menzel runs the language school New Chinese in Beijing.
