The secured transactions framework in China is governed by the 2007 Real Property Act. This act makes provision for non-possessory interests in movable property, and creates a public, online registry. It is possible to create security interests movables, intangibles and tangibles, such as inventory, accounts receivable, intellectual property or stocks. By virtue of the floating charge, future property can also be the subject of security interests. Virtually all personal property in China could be the subject of security interest, as Articles 180-181 of the 2007 Act explain that any asset which is not expressly prohibited from being the subject of a security interest (by any law or regulation) can be used for security.

However, registration is slightly fragmented, as there are different registries based on the type of personal property being used. This can lead to issues regarding priority, which are dealt with in Articles 199 and 239 of the 2007 Act.

There is an upcoming reform, as various rules relating to secured transactions will be codified in the new amendment of the Chinese Civil Code. In the latest 2019 Draft, it seems that China will be taking a functional approach to secured transactions, as transactions which are substantially equivalent to secured transactions will be treated as secured transactions, although their form may differ from a classic secured transaction. This includes conditional sales, factoring or financial leases.

English Translations of the 2007 Real Property Act: