Recent headlines have spotlighted prominent figures facing travel bans, prompting a critical examination of China's debt enforcement mechanisms.

In the past few days, Yu Liang and Feng Lun have both appeared in news stories regarding "restrictions on high consumption." Yu Liang's case involves a Vanke enforcement case with a target amount of 4.99 million yuan. Feng Lun's situation warrants deeper discussion: the party actually subject to enforcement is Sanya Wantong Health Development Management Co., Ltd., with an enforcement target of 425,800 yuan. Feng Lun was made a restricted consumer because he serves as the company's legal representative. Feng Lun subsequently responded that the enforcement matter does not involve his personal payment obligations.

This exposes a long-overlooked issue: why should a company's debts restrict the legal representative's personal ability to fly, take high-speed rail, or stay in hotels? Many of my classmates at CKGSB are currently restricted in this manner due to corporate issues. Seeing so many elite individuals subjected to such limitations, I believe this represents a significant waste to society. My position is clear: China should gradually abolish the current "restriction on high consumption" system, particularly severing the automatic link between corporate debt and individual restrictions on legal representatives.

The Core of Modern Company Law: Separating 'Company' from 'Individual'

The most critical foundation of the modern corporate system is not listing or financing, but limited liability. China's current Company Law clearly states that a company is a legal person with independent legal property, bearing its debts with all its assets; shareholders of a limited liability company bear responsibility to the extent of their subscribed capital. When a legal representative conducts civil activities in the name of the company, the legal consequences are, in principle, borne by the company. The Supreme People's Court has also previously clarified that a limited company and its legal representative are independent civil subjects, and corporate debts cannot be borne personally merely due to one's status as legal representative.

However, a peculiar loophole exists within the current restriction system. Judicial interpretations stipulate that when the entity subject to enforcement is an organization, its legal representative, principal responsible persons, directly responsible personnel affecting debt performance, and actual controllers may also face restrictions on flights, high-speed rail, hotels, and other consumption. This creates a paradox: the law states corporate debts belong to the company, yet the enforcement process restricts personal mobility solely because of one's position as legal representative.

Feng Lun's case exemplifies this issue. If an individual provides personal guarantees, withdraws contributed capital, maliciously transfers assets, engages in personality confusion, or commits fraud, personal accountability is certainly warranted. But extending corporate debt consequences to individuals merely because they hold titles like chairman, general manager, or legal representative blurs the most important boundary of the modern corporate system. Debt recovery should target assets, not restrict people.

From 'Restricting Individuals' to 'Pursuing Assets'

The original logic behind the consumption restriction system is understandable: a person who has money but refuses to pay, while flying first class and staying in luxury hotels, is unacceptable. Yet the question remains—is the goal of judicial enforcement to recover money or to inconvenience the debtor's life? If someone hides assets, engages in sham transactions, or maliciously transfers funds, the solution is to investigate accounts, equity, real estate, and trace fund flows, pursuing legal liability for serious violations. But if a company has no money, and its legal representative has no personal repayment obligation, preventing them from flying or taking trains does not magically create cash.

It might even be counterproductive. An entrepreneur's core assets are rarely a house; they are clients, experience, industry relationships, and the ability to reorganize production and operations. The more you restrict normal economic activities, the weaker the ability to regenerate cash flow. This leads to an absurd situation: creditors want debtors to earn money to repay debts, while the system increases the cost of earning that money.

What China Can Learn from the US and Japan: Handling 'Failure'

The United States and Japan certainly do not condone debt evasion. However, their core mechanisms for handling market failure do not primarily rely on identity-based punishment like restrictions on flying or taking trains. Instead, they employ corporate independence, asset enforcement, bankruptcy reorganization, and debt discharge. US federal courts describe one of bankruptcy's key objectives as giving "honest but unfortunate debtors" a fresh start. Corporations can reorganize under Chapter 11; as independent entities, their bankruptcy generally does not automatically make shareholders' personal assets liable for corporate debts. Japan has similarly established bankruptcy, personal rehabilitation, and discharge systems, with courts explicitly stating these procedures aim to help debtors in financial difficulty achieve economic rehabilitation; eligible individuals can obtain discharge of remaining debts after fulfilling reorganization plans.

This is the core logic of mature market economies when handling failure: debts must be repaid, fraud must be punished, but failure must have an endpoint.

China Needs Abolition, Not 'More Targeted' Restrictions

In recent years, the Supreme People's Court has repeatedly emphasized distinguishing between "dishonesty" and "inability to perform," advocating for credit repair, enforcement settlements, installment payments, and temporary lifting of restrictions for those who have failed in business and genuinely lost the ability to perform. But I believe we can go further: ultimately, the consumption and travel-based restriction system should be abolished. Corporate debts should be enforced against corporate assets; personal guarantees should target personal assets; malicious asset transfers should face severe penalties; fraudulent debt evasion should incur civil or even criminal liability; and insolvency should lead to bankruptcy, reorganization, and discharge procedures. However, an individual should not face personal punishment for corporate debts simply because they serve as a company's legal representative.

This is not about protecting bosses; it is about protecting the limited liability company system itself. Over the past decades, China has focused on encouraging people to start companies, raise funds, invest, and expand. As we enter a stock economy era, we must complete the other half of the institutional framework: how companies fail, how debts conclude, and how individuals start over. A mature business society cannot only have escalators for the successful to rise; it must also have doors for the failed to re-enter the market after paying their dues. Pay back what can be paid. Punish who should be punished. But corporate debts are corporate debts, and personal debts are personal debts. Redrawing this boundary clearly is far more important than restricting whether someone can ride a high-speed train.