"Unlike the old days, people were no longer going to pawnshops for survival," Yang explains. "They became a way to deal with emergencies. When people wanted to buy something but didn't have enough money, they could pawn something valuable and redeem it another day."

Traditionally, people pawned clothes, antiques and ornaments made of gold, silver or jade. Today, diamonds and luxury goods, including bags and watches, are more common. Art and wine have also begun to appear on pawnshop shelves, as those markets have surged across China.

"The diversity of pawned objects is not limited to ordinary products," Yang says.

"Since 1997, such commodities as real estate, private cars, stock equity and receivable accounts have found places in pawnshops."

At Huaxia Pawnshop, the monthly interest on a pawned house is 3.2 percent; that for a private car is 4 percent; and that for common goods is 4.7 percent.

Pawnshops' current image is very different from in the past, Yang says. They used to be a place of shame. Entering one was a sign of absolute poverty, and people pawned goods only as an act of desperation.

"Many customers (today) are wealthy people who just want a quick loan," Yang says.

Pawnshops' staff, too, are different. Many employees are professional jewelry appraisers, bank clerks or secondhand car salespeople, Yang says, adding that they can tell whether an object is genuine or fake.

"The most difficult part is choosing a reasonable price to offer. If the price is too low, it won't satisfy the customer. But if the price is higher than it should be, there will be risks," Yang says.

"It's quite hard to control, and it is based on the examiners' observations and judgments of the market."

When the redemption period passes, goods are called "dead pawns", meaning the pawnshop has the right to sell them. At this stage, a whole new set of customers looking for bargain luxury deals comes in.

Zhang Yusi, a 28-year-old lawyer from Beijing, says: "I bought two Chanel bags from a pawnshop near Nanluogu-xiang. They are unlikely to be fakes as the lender approved a loan on them. I was able to buy an almost new Chanel bag at a 50 percent discount."

Traditional Chinese pawnshops were single stores, often opened by a husband and wife. Today, most are part of a chain.

"Every year, we open new stores in Beijing," Yang says.

"We locate our shops in commercial areas, usually in a shopping center, because there are still misunderstandings about pawnshops. We want to show potential customers what we're doing and tell them that they should not be embarrassed to visit one."

The industry differs among regions and cities, he says. In Zhejiang province, there are many small- and medium-sized enterprises. And stocks and receivable accounts are more than half of all pawnshop business.

In Beijing, the business is more diversified and international. Customers include a growing number of foreigners, most of whom pawn watches, he says.

Contact the writer at xiaoxiangyi@chinadaily.com.cn.

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