Foreigners and locals who fail to pay off their business debts in Guangdong province after being ordered to do so in court may find their way out of China blocked at the border, thanks to a new regulation.
The rule, drafted by Guangdong High People's Court and Guangdong Provincial Department of Public Security, makes it possible to prevent heavy debtors from leaving the mainland.
It gives police officers the power to stop people at customs checkpoints if the deadbeat, or Laolai - a derogatory term in Chinese used for diehard debtors - tries to leave the country.
Guangdong was the first province in China to introduce such legislation. It came into effect on Monday and applies to both Chinese citizens and foreigners.
Any bad debtor from Guangdong who tries to leave China from other cities, such as Shanghai or Beijing, will find their way blocked there also because monitored names will be shared by police nationwide, an unnamed press official from the court told China Daily.
Monitored debtors who have left China will not be allowed to return until they have cleaned up their finances, he added.
The new regulation allows police officers to seize the travel documents of deadbeat debtors and impound their vehicles at any location.
Zheng E, president of Guangdong High People's Court, said the new cooperative mechanism aims to restrict the growing number of bad debtors in the southern province that borders Hong Kong and Macao.
Guangdong, one of China's economic engines, is also one of the bad-debtor blackspots.