Journey to the Future: The Assignment of Future Receivables in China

The legality of the assignment of future receivables in Chinese law has undergone a significant transformation, representing another instance of Chinese law continuously updating itself to meet transactional demands. Chinese law does not recognize the independent juristic act of real rights, thus offering a more flexible legal framework for explaining the assignment of future receivables. To eliminate the negative externalities of the assignment of future receivables, it is essential to continuously refine the certainty standard to exclude assignments of future receivables that lack any determinability and to establish a unified registration system. The effect of future receivables assignment occurs immediately at the time of agreement, at which point the future receivables will become the enforceable assets of the assignee.