The Supreme People’s Court of China Wednesday publicized a judicial ruling to prohibit luxury consumption by people legally in debt.

Yu Lingyu, official with the Supreme People’s Court, said due to the lack of a full-fledged credit system in China, some executees could get away from their legal obligations while spending freely. The judicial ruling was made to prevent such intentional debt evasion.

According to the new judicial interpretation, executees are prohibited from luxury consumptions such as traveling first-class on planes, trains and ships; spending on five-starred hotels, restaurants, night clubs etc; buying property and renting high-class office buildings; touring; buying cars for private use, or sending children to schools with expensive tuition. (Xinhua)

Here’s a link to a longer Xinhua piece that was on the SPC web site:  ??????????????????????????. I haven’t seen the actual judicial interpretation in Chinese or English yet.

My first thought here was to wonder what sort of egregious cases prompted this ruling. If it was indeed a reaction to a real problem, then you had debtors running around racking up huge expenses on luxury items while creditors struggled to get paid.

It looks like this is a punitive measure that would be used by courts in cases where debtors have either failed to disclose assets or done so incorrectly. Piss off the judge and they’ll scrap your first-class air travel and your kid’s private school.

This presumes of course that relevant information comes to light. The interpretation does require the cooperation of certain parties and institutions (e.g. banks), although I’m not so sure what sort of responsibility that entails.

This is not incompatible with, nor does it in any way replace or interfere with, the system of asset attachment or preservation in legal cases. Presumably bad faith spending of assets that are under protective orders are within the scope of this ruling.

My inner voyeur is waiting for this to be applied to a high-level private businessman whose company goes under. It would be rather entertaining to see one of these dudes forced to cut back on the bling. However, my inner skeptic tells me that there are far too many ways to hide assets, and implementation of these rules is going to be quite difficult.