Since the implementation of China's Enterprise Bankruptcy Law in 2007, the number of cases of Chinese bankrupt enterprises undergoing bankruptcy liquidation through judicial led procedures has been decreasing year by year, and the Enterprise Bankruptcy Law has fallen into a dilemma in the process of market transformation. In order to explore the optimization path of China's judicial led bankruptcy procedure, a theoretical research method based on judicial operation and public management is studied, and a joint protection mechanism of public policy and bankruptcy law for the rights and interests of enterprises and employees is proposed. Research suggests that public policy and bankruptcy law need to be optimized separately from administrative and judicial agencies' corporate restructuring efforts to safeguard the rights and interests of enterprises. Public policies and bankruptcy laws need to provide social support mechanisms for employees based on political propaganda and rights definition to safeguard their rights and interests. The research aims to address the difficulties in conducting bankruptcy proceedings under the current judicial leadership by analyzing the combination of China's public policies and bankruptcy laws, to promote the updating and construction of social security mechanisms.