The private equity funds are now under the responsibility of China Securities Regulatory Commission but faces problem on how to regulate it. ANBOUND think tank scholars highlighted that the supervision on private equity fund should be compatible with existing laws. It is necessary to distinguish the differences between regulatory rules and civil law, but there is no need to pursue one specific law to solve all the problems. The regulation on private equity fund should not be too strict. Instead, the regulators should have more open-minded attitude and retain the flexibility of innovation system in order to meet the demand of industrial upgrading.