In consequence-less America, the stigma of defaulting on one's personal responsibilities is a badge of honor for a risk-seeking public. No matter what, the government has your back if you want to buy a fridge, boat, or car - serial defaulter or not. However, hot on the heels of their proclamation that "malicious selling" of stocks is illegal, the Chinese government has extended its punitive measures against defaulting citizens, who are now banned from traveling on high-speed trains.
- *CHINA BARS DEFAULTERS FROM TAKING HIGH-SPEED TRAINS: XINHUA
This extends the already significant restrictions on 'defaulters' in place since last year (via Xinhua) [4]...
People who fail to fulfill court orders will face travel, financial and employment restrictions, said the Supreme People's Court (SPC) here Thursday.
The SPC has signed a memorandum with six central government departments and China Railway Corporation to impose harsher restrictions on defaulters, said Jiang Bixin, vice president of the SPC, at a press conference here.
They will be banned from flying and traveling in upper-class sleeper train compartments, as well as taking positions as legal representative, member of the board, member of the board of supervisors and senior executive of a company, Jiang said.
Besides restrictions on traveling and employment, the defaulters will face constraints when applying for a loan or opening a credit card.
When a corporation becomes a defaulter, its legal representatives, chief executives and those directly responsible for fulfilling the obligation will be subject to the same restrictions as individual defaulters, according to Jiang.
Refusing to implement court judgements has become quite rampant in China, he said.
"About 70 percent of debtors do not willingly fulfill court judgements. This not only harms legal interests of obligees but also social morals and mutual trust among people," he said.
By Wednesday noon, there were 55,920 on the SPC's blacklist of defaulters, about 46,500 individuals and 9,400 corporations.
The SPC will work with police and regulators of banks, state-owned enterprises, civil aviation, and business, Jiang said.
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So while the Chinese government embraces the painful downside of capitalism in its personal defaults (and recognizes the moral hazrd), it entirely ignores it when it comes to stock market downside... perhaps they are learning from America what really matters after all.
