Red chip and VIE
Round-trip investment
Round-trip investment refers to directly domestic investment activities carried out by domestic residents through SPC, including but not limited to purchasing or replacing Chinese side equity of domestic enterprises, incorporating foreign-invested enterprises in the country and purchasing or controlling domestic assets under agreement through the enterprise, purchasing domestic assets based on agreement and investing in foreign-invested enterprises and adding assets to domestic enterprise with such assets.
The round-trip investment refers to the economic behavior of a domestic investor in one economy to transfer the monetary capital or equity held overseas, and then input into the economy as direct investment. The round-trip investment could be divided to narrow and general senses. The former only refers to the cross-border round-trip activities of monetary capital, while the latter also contains cross-border equity transfer caused by reverse takeover.