Foreigners and locals who fail to pay off their business debts in Guangdong province after being ordered to do so in court may find their way out of China blocked at the border, thanks to a new regulation.
The rule, drafted by Guangdong High People's Court and Guangdong Provincial Department of Public Security, makes it possible to prevent heavy debtors from leaving the mainland. It gives police officers the power to stop people at customs checkpoints if the deadbeat, or Laolai - a derogatory term in Chinese used for diehard debtors - tries to leave the country.
Guangdong was the first province in China to introduce such legislation. It came into effect on Monday and applies to both Chinese citizens and foreigners. Any bad debtor from Guangdong who tries to leave China from other cities, such as Shanghai or Beijing, will find their way blocked there also because monitored names will be shared by police nationwide. Monitored debtors who have left China will not be allowed to return until they have cleaned up their finances.
The new regulation allows police officers to seize the travel documents of deadbeat debtors and impound their vehicles at any location. Guangdong, one of China's economic engines, is also one of the bad-debtor blackspots. Some years ago, Guangdong banned bad debtors from taking air trips, living in hotels with three stars or more and visiting saunas and other luxury entertainment venues.
A high-level officer from the economic criminal investigation department, under Guangdong provincial bureau of public security, said provincial police wanted to help. Other courts around the nation have taken steps to reel in bad debtors. Inadequate enforcement has long troubled the courts.
In late 2005, the central government established a "deterring" mechanism, that involves a database of information from convicted people's banks, commerce, real estate, custom, project bidding and vehicles information.
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