Part 6/11:
For instance, Shani Province—a coal hub transitioning to clean energy—reports nearly 40% of its industrial firms operating at a loss, double the national average. Cases such as Daun Automobile, which pivoted unsuccessfully to premium electric vehicles, exemplify local resistance to shutting down inefficient operations.
Legal barriers further hinder bankruptcy filings, with court judges often required to resolve grievances preemptively before allowing bankruptcy—indicating a system designed more for social stability than fostering economic efficiency. As a result, defaults remain rare in China, preventing a straightforward reallocation of resources to healthier firms.