Analysis Of The Nature Of Government Investment Promotion Contracts

The investment promotion contract(hereafter “IPC”)is the most important carrier for the local government to achieve the purpose of promoting investment and implementing the investment promotion policy.Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Agreement Cases issued in 2019 categorizes government and social capital collaboration contracts that possess the characteristics of administrative contracts as administrative contracts.However,due to the complexity of administrative management and the diversity of the agreement between the parties,the understanding of the meaning of administrative contracts is still controversial.Moreover,government IPCs contain both civil and administrative factors,thus no unified standard has formed regarding the nature of the contract theoretically or practically,which has frequently led to different judgments regarding the same issue,undermining judicial credibility.By analyzing publicly available cases concerning government investment promotion disputes heard by the Supreme People 's Court and the High People 's Court,it was found that the identification and analysis framework adopted by judges to determine the nature of the contract gave more weight to the "meaning elements" and "purpose elements".Although judges clarified the specific factors for consideration and formed a general argumentation logic,when they analyzed the nature of the government IPC in detail,there were different understandings in the equality of contractual parties,and no unified standard for identifying the connotation and extension of each contractual element has been reached.In addition,the dual status of administrative organs was ignored,and little attention was paid to how identifying the nature of the contract could impact on the balance of judicial rights and obligations,and on the way and degree of remedies.In government IPCs,administrative organs collaborate with social capital and provide preferential policies and procedural convenience in exchange for direct and fundamental economic benefits.Such organs perform their inherent economic functions in doing so.Although the space for autonomy in some contracts is limited,the counterparties still enjoy the veto power in deciding whether or not to enter into a legal relationship.Judging from the disciplinary perspective of the law,no relationship of management and obedience exists and the contractual parties are equal.The administrative organs do not have a dominant position over the legal relationship to be concluded.Preferential policies and procedural convenience are the embodiment of contractual consideration,and there is no right and obligation in administrative law between the parties.Judging from the equality of contractual parties,the purpose of the contract and the legal relationship such contacts govern,government IPCs are civil contracts in essence.In the context of Chinese legal system,which is public-private law dichotomy,identifying government IPCs as civil contracts is more reasonable after taking the process of entering into a contract,the way to settle disputes,and the responsibility of breaching a contract into consideration.Meanwhile,in a contract dispute relating to government investment promotion,administrative organs do not always enjoy absolutely dominant positions,thus defining such contracts as civil contracts helps to clarify the application of law and balance judicial rights and obligations of contractual parties.Civil procedures are applicable to settle such contract disputes,and administrative organs can,as plaintiffs,require counterparties to perform contractual obligations,assume liability for breach of contract,or compensate for losses directly,which better reflects to the intentional characteristic of the contract.Moreover,emphasizing on such contractual characteristic and empowering contractual parties with more trading autonomy could facilitate the exercise of policy formation functions by the judiciary,the transformation of government functions,the promotion of the collaboration mode between public-private bodies,and the development of regional economy.