China's parliament adopted a long-awaited corporate bankruptcy law for both state-owned and private companies on Sunday, with the aim to protect both creditors and workers of bankrupt enterprises, Reuters reported. The new law that will come into effect on June 1 2007 states that all insolvent enterprises will use assets to pay creditors first, and use any remaining assets to pay laid-off workers. "The provision is a compromise that aims to protect both creditors and workers of insolvent enterprises," Reuters quoted Cheng Siwei, vice-chairman of the NPC Standing Committee, as saying. Wang Xin, a law professor at Renmin University, said paying creditors first in insolvency cases was common practice in market economies and would help to boost foreign investors' confidence in investing in China.