Due to the reform and opening-up policy，China hasbecome one of the most attractive recipients of FDI and has gained high FDI inflows especially after 1990.The aim of this study is to investigate the impact of foreign direct investment (FDI) on economic growth in China during the period 1987-2010. The theoretical framework shows positive impact of FDI on economic growth because it serves as a channel through which new technology is transferred from one country to another and thereby it increases output and GDP in the recipient country.Different approaches will be used to show the relationship between the FDI and GDP.Analysis will be based on the regression model using panel data analysis for 31provinces in China.