Legal basis: Civil Code of People's Republic of China (PRC).
Article 395 The following properties that the debtor or a third party has the right to dispose of may be mortgaged: (1) Buildings and other land attachments; (2) The right to use construction land; (3) the right to use the sea area; (4) Production equipment, raw materials, semi-finished products and products; (5) Buildings, ships and aircraft under construction; (6) means of transportation; (seven) other property not prohibited by laws and administrative regulations. The mortgagor may mortgage the property listed in the preceding paragraph together.
Article 396 Enterprises, individual industrial and commercial households and agricultural producers and operators may mortgage existing or future production equipment, raw materials, semi-finished products and products. If the debtor fails to perform the due debt or realize the mortgage right according to the agreement of the parties, the creditor has the right to be paid in priority for the chattel when determining the mortgaged property.