How They Do It Elsewhere

Kevin Drum points to this article in the LA Times about the decidedly different tenor of corporate failures in China:

First, Tao Shoulong burned his company’s financial books. He then sold his private golf club memberships and disposed of his Mercedes S-600 sedan.

And then he was gone. And just like that, China’s biggest textile dye operation — with four factories, a campus the size of 31 football fields, 4,000 workers and debts of at least $200 million — was history.

….In recent weeks, there have been many fires, increasingly large-scale. In Zhejiang province, south of Shanghai, Ye [Hang] counted at least six major bankruptcies, including Jianglong; Feiyue Group, China’s biggest sewing machine maker; and Zhejiang Yixin Pharmaceutical Co., among the largest in that industry.

“Of these six, one [owner] committed suicide, one was detained by police, and the remaining four all escaped,” he said. “I can imagine that in the future, there would be more such cases as a result of the chain reaction.”

Kevin admits, “I confess that the thought of Wall Street executives in failed banks either being detained by the police or going to ground and hiding in terror holds a certain appeal,” and I have to admit I’m inclined to agree. In China they hara-kiri, in the US, they’re given millions of dollars in golden parachutes.

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