On the Necessity of Constructing Independent Pawning Right Rules Under the Framework of Real Rights

Pawnbroking disputes arising from the exercise of pawning rights are not uncommon in judicial practice, yet the current legal norms have not incorporated the pawning right, a customary real right, into the real rights system. Meanwhile, the Measures for the Administration of Pawnbroking has failed to accurately define the nature of this time-honored transaction custom. As a prevalent customary real right in private lending relationships, pawnbroking activities have prominent usufructuary and security attributes. Therefore, establishing a dedicated legal regime for pawning rights can effectively prevent the improper expansive application of security interest rules, maximize the utilization value of pawned property in circulation, and better meet the financing needs of micro, small and medium-sized enterprises and individual residents. Applying the same set of rules to both pawning rights and security interests will only gradually erode the living space of pawning rights. Hence, there is an urgent need to construct a Chinese-characteristic pawning right regime centered on its usufructuary attributes.