ABSTRACT:With the deepening of reform and opening up and the implementation of the investment policy, FDI in Jiangsu province grows rapidly in a large scale. However, environmental pollution caused by economic development should not be overlooked, and we need the implementation of effective environmental regulation to solve the problem. This paper analyze the data of FDI projects, the amount and flow of industry and industrial during the year 2000 to 2010 in Jiangsu province, and study the causality test method of the relevant between FDI and environmental pollution based on Environmental Kuznets Curve. Data shows FDI projects reduce since 2005, but the amount of FDI continues to increase, and maintain $ 25 billion. FDI mainly invest to the manufacturing industry, only the amount of manufacturing industry reach as much as $ 17 billion, while manufacturing industry is composed by pollution-intensive industries which leading to pressure to the environment. FDI waste emissions is rising, polluting industries are concentrated in the electricity, chemical materials, non-ferrous metal smelting and other industries, which match the invest industry of FDI. Nevertheless, with the increase of FDI, the unit industrial waste emissions is gradually reduced, and it suggests FDI does not always have a negative effect on environmental pollution. Take sulfur dioxide emissions for example, when the amount of FDI reaches 14.774 billion U.S. dollars, FDI has a positive effect on the environment pollution. Thus the propose of environmental regulation in Jiangsu Province to ease environmental pollution should start by strengthening environmental regulation legislation, such as adjusting the investment structure, promoting technical overflow, establishing Government's view of achievements of sustainable development, increasing the administrative law enforcement, managing pollution market,meanwhile, network channels for public participation are effective.
Keywords: FDI; Industrial waste; Environmental pollution; Environmental Regulation