The legal transplant of the English floating charge and the pledge over receivables into Chinese law

The article attempts to reveal the policy and rationale behind the adoption of (1) the floating charge,¹ and (2) the pledge over receivables² in the Chinese Property Law of 2007. An initial discussion will highlight the extent to which the Chinese the floating charge applies to tangible and intangible forms of property. It is argued that its adoption from English common law is premised on the economic function of the floating charge.³ The use of pledge over receivables in China is also discussed. In a contextual analysis of the Chinese property law over receivables, it is argued that the operational mechanism which is required for a contract to assign is in fact a transfer of property, and that operational mechanism is similar to the English equitable assignment.⁴ It is further argued that the Chinese pledge against a true sale from the regulatory objective of property law requiring the pledgee to return the surplus to the pledgor arose from the sale of pledged assets⁵ and that its registration serves as property rights in terms of control and exclusion.