Overseas funds mainly enter the Chinese market through the following channels:

1. Legal channels for foreign direct investment.

2. Use my country’s current account convertibility to enter the Chinese market. Common methods include false reporting of import and export prices, payment in advance, delayed foreign exchange payment fraud, parallel loans, mistakes in advance and borrowing foreign debts, etc.

In addition to enterprises, individuals also mix funds under the capital account into the current account and flow into the country through personal foreign exchange remittances. This situation was once quite common, and there are three main situations:

( 1) It is a domestic resident who remits the principal or income of overseas investment in the country in the form of non-trade foreign exchange for foreign exchange settlement;

(2) It is an overseas investor who remits the money in the name of himself or an authorized agent, and in the name of Foreign exchange settlement in the name of an individual;

(3) The overseas investment corporation of a foreign-invested enterprise remits funds in the name of personal donations, etc. to the legal representative or board member of the domestic foreign-invested enterprise, and adopts the method of breaking up the funds into parts. Foreign exchange settlement serves as the company's working capital.

3. Use foreign-invested enterprises in China as the channel.

(1) By establishing investment companies or production subsidiaries and joint ventures in China, or in the name of constructing joint ventures and wholly-owned projects, in the form of enterprise registered capital or capital increase, it is collected from abroad Foreign exchange and handling foreign exchange settlement.

(2) It is through shareholder loans of foreign-invested enterprises, that is, foreign-invested enterprises use shareholder loans to make external short-term borrowings and settle foreign exchange.

(3) Domestic foreign-funded enterprises and overseas affiliated enterprises cooperate with each other to facilitate the entry of overseas funds by temporarily collecting accounts payable, receiving payment in advance, delaying exports, etc. 4. Provide foreign exchange loans and settlement of foreign exchange through domestic enterprises.

5. Independent fund allocation by domestic Chinese and foreign-funded banks.

6. Capital market channels.

There are the following ways for domestic capital to conduct overseas investment and overseas financing: At present, domestic enterprises mainly conduct overseas investment through direct investment, overseas borrowing and trade credit.

In addition to using trade credit advance payment and deferred payment methods for overseas investments, enterprises often also choose overseas equity financing, overseas debt financing and overseas listing for foreign exchange financing.

Extended information:

1. Under normal circumstances, the inflow and outflow of funds does not involve taxation, but it will involve taxation on related businesses. For example, if it comes through trade, business tax will be levied. If the capital is added, stamp duty should be collected by the industrial and commercial authorities; if the equity is transferred, the capital gains tax on the added value must be withheld and paid.

2. If overseas company funds want to enter the country, it depends on the nature of the company. If it is a field that is not restricted or prohibited by foreign investment, it is usually divided into two categories: trade and capital. Payment can be made from overseas to within the country through transactions between the two parties. If it is an investment, it must be paid under the capital account. Both methods must be approved by the State Administration of Foreign Exchange.

People's Daily Online - How overseas funds enter the Chinese market