Legal basis:
The Chinese People's *** and National Code
Article 394 In order to guarantee the performance of the debt, the debtor or the third party does not transfer the possession of the property, the property will be mortgaged to the creditor, the debtor does not perform the due debt or the occurrence of the circumstances agreed by the parties to realize the mortgage, the creditor has the right to receive priority compensation for the property.
The debtor or the third party under the preceding paragraph is the mortgagor, the creditor is the mortgagor, and the property for which security is provided is the mortgaged property.
Article 395 The following properties which the debtor or the third party has the right to dispose of may be mortgaged:
(1) buildings and other land attachments;
(2) the right to use the land for construction;
(3) the right to use the sea area;
(4) the production equipments, raw materials, semi-finished products, products;
(5) buildings, ships, aerial vehicles which are being buildings, ships and aircraft under construction;
(vi) means of transportation;
(vii) other properties not prohibited from being mortgaged by laws and administrative regulations.
The mortgagor may mortgage the properties listed in the preceding paragraph together.
Article 425 For the purpose of securing the performance of a debt, the debtor or a third party pledges its movable property to the possession of the creditor, if the debtor fails to perform the debt due or the circumstances agreed by the parties for the realization of the pledge occur, the creditor has the right to be compensated in priority for the movable property.
The debtor or a third party under the preceding paragraph is the grantor, the creditor is the pledgee, and the delivered movable property is the pledged property.