The theoretical and empirical methods have been adopted to analyze FDI＇s influence on China＇s domestic enterprises＇ industrial expansion. The result shows that there are many factors determining the influence of FDI on the domestic enterprises＇ industrial expansion. In China, the foreign-invested enterprises have exerted significantly positive influence on the domestic enterprises＇ industrial expansion through market competition and technological spillover. The mechanism is quite complicated. Hence, the utilization of FDI can lead to the technological progress, and further the industrial expansion and development.
