China's Legislative Shift: A Soothing Balm for Creditor Concerns Amid Protests

China's top legislative body has softened a contentious law allowing creditors to target former shareholders, following protests in 11 cities. The law, aimed at holding original shareholders accountable for debts even after selling shares, has faced backlash for retroactive enforcement, sparking economic discontent.

In a move to quell rising protests, China's top legislative body has eased a controversial law aimed at strengthening creditors' positions against former shareholders. The legislative affairs commission of the National People's Congress revised this law after protests erupted in 11 cities.

The wave of protests focused on the law's retroactive enforcement which held former shareholders liable for debts after company insolvency, even upon transfer of shares. The commission stated the law should not apply to those who exited before its enactment in July, aiming to stabilize the business climate and consumer confidence.

Protests symbolized public frustration with economic policies during an industry downturn. Videos documented protesters from various demographics demanding legal clarifications. The shift comes as Beijing grapples with broader economic challenges highlighted by the Evergrande collapse, holding over $300 billion in debt.

(With inputs from agencies.)