Abstract: Attracting foreign direct investment (FDI) is an important measure for China to realize high-level opening-up and high-quality economic development. The development of industrial intelligence can enhance the quality of urban labor supply, promote industrial restructuring, improve the level of innovation, and form agglomeration economies, thus becoming a“new engine”for China to attract foreign investments. The empirical study based on China’s 2008-2019 municipal panel data shows that, firstly, industrial intelligent development can significantly attract FDI inflows. Secondly, the mechanism analysis shows that the human capital optimization effect, the innovation-driven effect, the industrial structure optimization effect, and the industrial agglomeration effect are the important channels through which industrial intelligent development attracts FDI inflows. Thirdly, the heterogeneity analysis reveals that, in the cities with higher levels of trade liberalization and east of the Hu Huanyong Line, the development of industrial intelligence has a stronger attraction for FDI; in addition, due to the agglomeration effect of industries, the development of industrial intelligence has a stronger role in attracting FDI in the cities of lower administrative levels. Fourthly, further analysis finds that, by attracting the inflow of FDI, industrial intelligent development promotes the development of the city’s foreign trade and promotes the improvement of the city’s total factor productivity. Therefore, we should further promote the development strategy of urban intelligent industry, focus on differentiated policy adjustments, and give full play to the important role of industrial intelligence as a “new engine”for China to attract foreign investments.

Key words: industrial intelligence, foreign direct investment, human capital, innovation level, industrial structure optimization