After opening its doors to the international business scene, foreign direct investment has made considerable contributions to the economic growth in Jiangsu Province. But as a coin has two sides, there is also a negative aspect that we are faced with the environmental degradation. The purpose of this paper is to analyze the environmental effect of FDI and provide some reference to the harmonious development of economy and environment in Jiangsu province. In this paper, we started with a research about a present situation of foreign direct investment and environment of Jiangsu Province, and then we made an empirical analysis on the environmental effect of foreign direct investment in Jiangsu Province, finally we put forward some policy proposals. The sustained growth of foreign direct investment is one of the important causes of environmental degradation in Jiangsu Province. We should improve environment supervision and management in developing FDI.
