Chinese Government Speeds up to “Kill” Zombie Auto Companies
This December 4th, Ministry of Industry and Information Technology of the People’s Republic of China(hereinafter referred as MIIT) announced a “clean-up list” of ninety-two “zombie companies” in automobile industry.
According to the announcement, these companies, whose sales records were zero or very a few for 2 years in a row, will stay on this list from December 1st, 2015 to November 30th, 2017, during which MIIT will not proceed their requests of bringing new products into markets and after that, any company who hadn’t applied or failed to pass evaluation will be cleaned up.
Zombie company refers to a company that needs constant bailout in order to operate but refuse to proceed bankruptcy process, which could do harm to the market by misleadingthe public and hindering the economic growth.
This time, MIIT’s lengthened list is believed to be a signal that Chinese government will speed up the effort to clean up these zombie companies.
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