Guangzhou City, Provisions for the Administration of Government Contracts

(4) contracts for loans, financial assistance, subsidies, etc.;

(5) concession contracts for urban utilities;

(6) contracts for the attraction of investors; and

(7) other government contracts (Article 2).

These Provisions shall govern the entry into, and performance and management of, government contracts by the city government and the work departments thereof.

These Provisions shall not govern government contracts entered into in connection with the taking of emergency measures in response to contingencies (Article 3).

These Provisions shall apply mutatis mutandis to government contracts entered into by city government agencies (including non-permanent organisations), district (county-level city) governments and their departments (Article 37).

Main contents: A contract involving the use of state-owned assets or fiscal funds or utilisation of natural resources or public resources entered into by a subordinate entity of a working department of the city government with a subject amount of at least Rmb100 million shall be submitted to the work department of the city government for review (Article 4).

In entering into government contracts, the city government and the work departments thereof are forbidden from doing any of the following:

(1) violating the statutory procedure or statutory conditions for entering into contracts;

(2) entering into a contract with a temporary organisation or internal organisation as a party;

(3) serving as the guarantor of a contract in violation of laws and regulations;

(4) agreeing to an unlawful request raised by the other party to the contract, or a third party; or

(5) specifying in the contract other provisions that violate laws, regulations or rules, or that harm the interests of the state, the collective or a third party (Article 7).

When drafting a government contract, the model contract shall be used preferentially (Article 8).

In the course of the negotiations for, and the drafting of, a government contract, the work department of the city government shall thoroughly familiarise itself with the assets, creditworthiness, performance capacity, etc. of the other party to the contract and, when necessary, may conduct a credit inquiry. If a major or difficult issue is involved or the risks are relatively large, it may engage a professional firm to conduct an investigation (Article 17).

A lawfulness review shall be conducted before the execution of a government contract. The city government or a work department thereof may not execute a government contract until a lawfulness review has been conducted (Article 18).

The main subjects of a lawfulness review shall include the following:

(1) whether the provisions of the contract will give rise to legal risks or give rise to an adverse impact on the safety of state-owned assets or fiscal funds or the effective utilisation of natural resources or public resources;

(2) whether the contracting entities are qualified;

(3) whether the statutory procedure for the entry into contracts has been complied with;

(4) whether the contract terms are complete and valid: and

(5) whether the provisions of Article 7 hereof are violated (Article 20).

The following contracts entered into by a work department of the city government as a party shall be sent to the city government's legal department for review before execution:

(1) a contract with a subject amount of at least Rmb100 million entered into by a work department of the city government as a party; or

(2) a contract with a subject amount of less than Rmb100 million entered into by a work department of the city government as a party where the matter involved is relatively complex or the legal risks are relatively significant such that the city government deems it necessary to be reviewed by its legal authority.

The preceding paragraph shall not apply to government contracts using a model contract formulated by a relevant state, provincial or city department of which the major provisions have not been amended or revised (Article 22).

The official text of a contract shall be signed by the legal representative of the city government or the working authority thereof or the officer authorised by the legal representative and be sealed with the administrative seal or contract seal (Article 27).

In the course of the resolution of a dispute arising in connection with a government contract entered into by the city government as a party, the work department of the city government may not waive a lawful right or interest enjoyed by the city government without the city government's consent.

In the course of the resolution of a dispute arising in connection with a government contract entered into by a work department of the city government as a party, no office or individual may waive a lawful right or interest enjoyed by the work department of the city government without the consent of the department's legal representative (Article 32).

State-owned dedicated investment and financing groups under the city shall formulate a contract management system for the group based on these Provisions and the actual circumstances of the group and strengthen the management of its entry into, and performance of, contracts.

Government debt contracts with a subject amount of at least Rmb1 billion entered into by a state-owned dedicated investment and financing group under the city as a party shall be submitted to the city government's legal department for review. The review procedure and requirements shall be handled with reference to these Provisions (Article 38).