Abstract Dongguan, once an agricultural county in Southeast Guangdong Province, has now become a modern industrial city and one of processing bases of the world, owing to have attracted a great deal of foreign investment(FI) since reforming and opening to the outside world in China. This paper firstly introduces the main characters and economic efficiency of FI in Dongguan, and then evaluates its effects on the economy, including the increase of urban economic strength, the development of local production network and labor market, and participant in the international labor division of territory. Thirdly, it points out such serious problems of FI as follows, the poor efficiency of technology diffusion from FI firms, the low level rate of materials' purchase in China, and other two facts. In conclusion, it puts forwards some countermeasures.
2001, Vol. 16 
