Specific legal provisions can be found in the Guarantee Law and the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Guarantee Law of People's Republic of China (PRC):
Guarantee law
Article 63 The term chattel pledge as mentioned in this Law means that the debtor or a third party gives his chattel to the creditor for possession as a guarantee for the creditor's rights. When the debtor fails to perform the debt, the creditor has the right to discount the debt or give priority to compensation with the price of auction or sale of the movable property in accordance with the provisions of this law.
The debtor or the third party specified in the preceding paragraph is the pledger, the creditor is the pledgee, and the transferred movable property is the pledgee.
The Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Guarantee Law of People's Republic of China (PRC).
Four. Description of pledge part
(1) Pledge of movable property
Article 85 After the debtor or a third party indicates his money in the form of special account, seal or deposit, etc. , will be handed over to the creditor possession, as a guarantee of creditor's rights. When the debtor fails to perform the debt, the creditor can use the money to get the priority.