United Nations data indicates that small and micro enterprises constitute approximately 90% of all businesses globally, provide over 60% of worldwide employment, and contribute roughly 50% of global GDP, making them a vital pillar for sustainable economic development. In China, the number of these enterprises has surpassed 60 million, contributing more than 50% of tax revenue, over 60% of GDP, more than 70% of technological innovation outcomes, and over 80% of urban employment, accounting for more than 90% of all businesses, serving as a crucial foundation for stabilizing employment, fostering innovation, and enhancing economic resilience and vitality.

Currently, due to multiple factors such as geopolitical conflicts, macroeconomic uncertainty, supply chain volatility, and shifting market demand, small and micro enterprises are facing escalating survival and development pressures, with business risks rising significantly on a global scale. In mature market economies like Germany and Japan, small and micro enterprises have consistently accounted for a high proportion of corporate bankruptcy cases in recent years, emerging as the primary group exposed to insolvency risks. Germany saw 19,500 bankruptcies among enterprises with 10 or fewer employees in 2025, while in Japan, small-scale enterprise bankruptcies comprised around 90% of all insolvency cases in the first half of 2026. Similar trends are evident in China's judicial practice, with the Shanghai Bankruptcy Court reporting that small and micro enterprise bankruptcy cases accounted for 90.44% of all concluded cases from 2024 to 2025.

These phenomena indicate that small and micro enterprises, due to their smaller operational scale, weaker risk resistance, and relatively limited financing channels, are more susceptible to market fluctuations and liquidity shocks. How to promptly identify and rescue distressed enterprises with operational value while legally eliminating inefficient and invalid entities has become a common challenge in bankruptcy system reforms across countries, as well as an important issue for enhancing economic resilience and optimizing market resource allocation.

The Fourth Plenary Session of the 20th Central Committee of the Communist Party of China explicitly stated that economic and social development during the "15th Five-Year Plan" period must adhere to the principle of "combining an effective market with a proactive government," emphasizing the need to "fully leverage the market's decisive role in resource allocation while better utilizing government functions" and to "create a market-oriented, law-based, and internationalized first-class business environment." The session made systematic arrangements for building a high-level socialist market economy system and enhancing the momentum for high-quality development, emphasizing "supporting the development of small and medium-sized enterprises and individual businesses," "improving the modern enterprise system with Chinese characteristics and promoting entrepreneurship," and requiring "accelerating the improvement of institutional mechanisms for market-based allocation of factors" and "promoting efficient allocation of various factors and resources," as well as "improving policies on mergers, bankruptcies, and replacements." These arrangements provide fundamental guidance for building a life-cycle institutional system for enterprises, unblocking factor flow channels, and optimizing the market's survival-of-the-fittest mechanism, while also pointing the direction for rescuing and empowering small and micro enterprises and improving market-based rescue and exit systems.

In recent years, China has placed great emphasis on nurturing small and micro enterprises and resolving their risks, continuously intensifying rescue and empowerment efforts, systematically advancing the construction of crisis rescue and market-based exit systems, and achieving positive results in local practical exploration and legislative improvement. At the practical level, various regions have introduced a series of reform and innovation measures based on the characteristics of small and micro enterprises, such as their small scale, asset-light operations, relatively simple creditor-debt relationships, and high overlap between ownership and management. Courts across the country have actively optimized the trial procedures for small and micro enterprise bankruptcy cases, improving judicial efficiency through measures such as streamlining and expediting cases to shorten disposal cycles. They have also vigorously promoted government-court coordination mechanisms, integrating judicial, administrative, financial, and tax resources to collaborate on credit repair, asset disposal, and employee placement, thereby resolving bottlenecks and difficulties in bankruptcy procedures.

At the legislative level, China's bankruptcy system is continuously being precisely adapted to small and micro enterprises. The Enterprise Bankruptcy Law (Revised Draft) has specially added special provisions for bankruptcy procedures for small and micro enterprises, based on their actual needs, with optimized designs such as simplified trial procedures, shortened bankruptcy cycles, and reduced bankruptcy costs, which are expected to alleviate the time and financial burdens on enterprises in bankruptcy proceedings. Furthermore, this legislative revision places greater emphasis on the rescue function, promoting a mechanism for retaining original investors' equity interests to balance the reasonable rights of original shareholders with the need for enterprise rescue, aiming to fully stimulate the enthusiasm of all parties to participate in reorganization.

At the same time, the work of rescuing and empowering small and micro enterprises still faces prominent challenges. From a judicial practice perspective, reorganization and conciliation, as the primary procedures for enterprise rescue, have extremely low application rates among small and micro enterprises, with many distressed enterprises that still have rescue potential failing to receive effective assistance. On the other hand, enterprises lack the willingness to proactively use legal tools to resolve crises. Influenced by traditional concepts, many business operators misunderstand bankruptcy procedures, equating reorganization and conciliation with "business failure," and generally harbor a "bankruptcy stigma." When enterprises encounter operational risks, they often choose passive support and delayed disposal, missing the optimal timing for risk resolution, leading to continuous depreciation of enterprise asset values and the spread of debt risks, which not only harms the legitimate rights and interests of creditors but also triggers problems such as employment pressure, resource misallocation, and risk spillover.

Looking ahead, it is essential to adhere to the governance philosophy of "prevention first, rescue priority, and orderly exit," and accelerate the construction of a comprehensive rescue and empowerment ecosystem for small and micro enterprises covering risk early warning, pre-rescue, enterprise rescue, and market exit. By improving the early risk prevention and control system, optimizing bankruptcy mechanisms adapted to small and micro enterprises, and popularizing bankruptcy law concepts, we can shift enterprise risk governance from passive post-event disposal to proactive pre-event prevention, and from single judicial rescue to multi-party collaborative governance, continuously optimizing the law-based business environment and providing institutional support for the high-quality development of small and micro enterprises.

First, improve the early risk warning and pre-rescue mechanisms for enterprises, advancing the risk governance threshold. Adhere to source prevention and early intervention for small problems, and build a dynamic risk warning system covering the entire life cycle of enterprises. Integrate enterprise-related data resources from taxation, finance, social security, and market supervision, strengthen information sharing and dynamic monitoring, and accurately identify potential risks such as cash flow tension, debt pressure, financing difficulties, and supply chain fluctuations. Establish a risk classification and tiered disposal model, and for small and micro enterprises experiencing operational difficulties, promote early intervention by government departments, financial institutions, and professional service agencies, comprehensively utilizing financing assistance, operational guidance, and out-of-court restructuring for pre-rescue, achieving early risk detection, early problem intervention, and early enterprise rescue, minimizing the possibility of enterprises entering bankruptcy liquidation due to missed rescue opportunities.

Second, improve the operational mechanisms for small and micro enterprise bankruptcy procedures, building an efficient and professional rescue system. Based on the characteristics of small and micro enterprises, such as their small scale, asset-light operations, and relatively simple creditor-debt relationships, further improve procedures for reorganization, conciliation, and liquidation, enhance mechanisms for streamlining and expediting cases, simplify handling processes, compress disposal cycles, and reduce institutional costs, forming an efficient bankruptcy disposal model adapted to the needs of small and micro enterprises. Deepen government-court coordination, departmental collaboration, and regional cooperation mechanisms, unblock coordination channels among judicial, development and reform, human resources and social security, taxation, and market supervision departments, strengthen policy alignment, resource coordination, and work synergy, and consolidate the joint force for enterprise rescue and market clearing. Fully leverage professional forces such as bankruptcy administrators, lawyers, accountants, evaluation agencies, and industry associations, build a one-stop professional service system integrating enterprise diagnosis, investment matching, debt sorting, and operational restructuring, continuously strengthen the construction of professional talent teams in bankruptcy law, finance, and taxation, comprehensively enhance market-oriented and professional service capabilities, and optimize the effectiveness of crisis rescue.

Third, deepen concept guidance and institutional popularization, creating a social atmosphere that encourages enterprise rebirth. Continuously strengthen bankruptcy law publicity and education, enhance the correct understanding of enterprise operators, creditors, and the public regarding the functions of reorganization and conciliation systems, guide society to establish a modern bankruptcy concept of "rescue priority and orderly exit," and break down the traditional perception of "bankruptcy as failure" and the "bankruptcy stigma." By publishing typical cases, conducting policy interpretations, and organizing special training sessions, continuously enhance the awareness and ability of small and micro enterprises to legally utilize legal tools such as reorganization and conciliation to resolve risks, guide enterprises to proactively seek professional help and promptly initiate legal procedures in the early stages of operational difficulties, foster a favorable atmosphere of "willingness to use, courage to use, and proficiency in using" the bankruptcy system, promote orderly market exit and effective rebirth, and better serve the high-quality development of China's economy.