China has to change the mode of economic growth, because the contradictions caused by the reform era and the way to stimulate economic growth by relying on external demand is failure gradually. Currently in China, Foreign Domestic Investment (FDI) are adapting to the new economic environment and Urbanization plays an important role in national development strategy which can adjust economic, social and environmental structure comprehensively.
It''s crucial to comprehend the relation between FDI and Urbanization. This study has four objectives: First, what kind of benefits and challenges are caused when FDI promote Urbanization development? Second, the relevance of FDI and Urbanization is a causal relationship? Or influence each other? And what is the role of FDI in this process? A dominant role or a strengthen role? Third, what kind of benefits and challenges are caused when FDI promote Urbanization developed in the Pearl River Delta. Fourth, find out the method to resolve these challenges in the Pearl River Delta, as well as to advise some enlightenment to other regions or cities in China which will develop this type of Urbanization.
The outcome of this study include : First, there are some benefits be generated by FDI which cause Urbanization developed in the Pearl River Delta, including (1) the development of capital, technology, personnel and management.(2) the growth of national economy.(3) the adjustment of industrial structure.(4) the agglomeration of Urbanization itself. And there are also some challenges include the obstacle of industries development, the pollution of environment, land abuse, and the disparity between urban and rural or interregional. Second, FDI and Urbanization have mutual promotion relation. And FDI can enhance the effect of Urbanization. Third, the urbanization being promoted by FDI in the Pearl River Delta bring some benefits. For example the expansion of urban scale, increase of the employment proportion of non-farm industries, the development of service industries, the fixed assets'' investment proportion which is invested by foreign investors in the Pearl River Delta are increased. And the challenges include: the imbalance of industries, the pollution of environment, the abuse of land etc. Fourth, the resolution of these challenges are adjusting the development structure of industries, reducing environmental pollution and land abuse, relaxing of the household registration system, as well as building social security system. Finally, the Urbanization in the Pearl River Delta has some enlightenment for exo-urbanization.