ABSTRACT
On 20 March 2007, the China’s National People’s Congress (NPC) passed the historic Property Law, the country’s fi rst comprehensive law on ownership and use of different types of property rights. In particular, Part Four of the Property Law adopts a number of modern secured fi nancing law principles regarding movable property as collateral. This is a signifi cant departure from the existing antiquated and restrictive secured fi nancing legal framework that was established under the 1995 Security Law (the Security Law) and the 2000 Supreme People’s Court’s (SPC) Judicial Interpretation of the Security Law. Much of the progress came as a result of extensive collateral law reform efforts spearheaded by China’s central bank, the People’s Bank of China (PBOC), with technical assistance from the World Bank, to improve access to credit by the country’s small and medium enterprises – hereinafter referred to as the ‘WB-PBOC Project’.1 Under previous laws, the requirements for taking security interests in movable assets were so stringent and restrictive that business assets such as equipment, inventory and receivables had virtually no value as collateral. This chapter overviews secured fi nancing law and practice in China including the process of reform, and analyzes the impact of the newly adopted Property Law.
