Analysis of relationship between FDI and environment in Liaoning province

Taking Liaoning province as an example, this paper discussed the relationship between foreign direct investment (FDI) and environment through the granger causality test and relationship test. The results showed that FDI in Liaoning province increased from 248 million dollars in 1990 to 15.444 billion dollars in 2009 with an average growth rate of 22.95%. The actual FDI mainly focused on the second industry, especially in manufacturing, with an average proportion of 50%. FDI exerted an important influence on industrial emissions. If FDI increased by 1%, industrial waste gas emissions would increased by 0.82%. Finally, the government should promote coordinated development between FDI and environment by optimizing foreign investment environment, adjusting the industrial investment structure and improving foreign environmental laws and regulations and strengthening environmental law enforcement in Liaoning province.