(Yicai Global) Jan. 30 -- Shanghai will establish a special court on Feb. 1 to deal with the piled up number of cases regarding corporate liquidation.

Shanghai needs to offer legal and market-oriented exit channels for firms that are failing, local newspaper Wenhui Daily reported yesterday, citing Liu Xiaoyun, the head of Shanghai High People's Court, who disclosed the news at the ongoing Shanghai Two Sessions annual political event. 

Bankruptcy cases cost common courts much time since they often involve complex procedures, the report added. Each year since 2016, some 48,000 firms in Shanghai have skipped the formal liquidation process. 

The Supreme People's Court has earlier approved Beijing, Shenzhen and Shanghai to establish bankruptcy courts, Liu said.

Improving legal frameworks is the foundation for optimizing business environment, Liu said, adding that bankruptcy cases require communication and cooperation among judicial, tax and other government departments.

Editor: Emmi Laine