A N A N A Ly Si S O N Leg A L S U P E Rv I Si O N O F Th E R O U N D-t Ri P P In G Ca Pit A L I N C H I N A

With the ever-accelerating process of economic globalization, both developed and developing countries have attached great importance to attracting and utilizing foreign capital. Since the1970s, China complies with current trends, actively promote the "Introduction" and "Going Out" strategy. While attracting a great deal of foreign investment, it also raised a particular investment phenomenon of round-tripping capital. So far, return investment has been widespread and growing into popularity. Domestic residents obtained the identity of the "foreign investment" in this way of round-tripping capital. While fully enjoying the foreign investment treatment, they, not only damages the tax sovereignty of the country, results in capital flight, money laundering and other negative effects, but also poses a severe challenge to China's foreign exchange management. Though round-tripping capital regulatory legal framework has been initially established, there are still many problems, we still need to make further research on the theory and practice.This article tries to list the typical cases of round-tripping capital in China with case analysis method to lead to the study of this particular foreign investment phenomenon of round-tripping capital. To compare the concepts of red-chip market, offshore companies, SPV, as well as the concept of "hot money", etc. That are closely related to round-tripping capital, to comprehensively analyse the phenomenon of round-tripping capital. At the same time, with the method of deductive reasoning, started from the scale of round-tripping capital in China and through the legal definition on round-tripping capital, we emphatically analyzed a series of legal issues triggered by round-tripping capital and summarized the existing laws and regulations on regulating return investment. Finally, the paper examined the legal regulation of international community on round-tripping capital, on basis of successful experiences in other countries, as well as the specific situation in China, the paper put forward suggestions to improve our country's legal and regulatory system on round-tripping capital.