Originally Posted by eponymous_coward

That's not how this works.

If your friend was traveling HKG-CTU-NRT, THEN it's a transit in China (CTU) from origin (HKG) to a third country (Japan). The LAX-HKG-LAX flights do not enter into this.

Going HKG-CTU-HKG means you're going BACK to your country of origin (HKG doesn't count as "China" for this, it's your country of origin). Your friend is going to get static at CTU like this blogger did, for the exact same reason. You need to be transiting from HKG through China to somewhere that isn't HKG to fulfill the visa free transit requirement.

Your friend should do something like this:

LAX-HKG-LAX on one set of flights

Second set of flights
Flight 1: HKG-CTU
Flight 2: CTU-NRT/ICN/someplace that's NOT HKG or China
Flight 3: NRT/ICN/someplace that's NOT HKG or China-HKG

Hope this helps.