Abstract: In order to explore the relationship between FDI  and China′s industrial structure change, path and effect of FDI on the upgrading of industrial structure in China are investigated Through collecting and analyzing data of 29 provinces (autonomous regions and municipalities) from 2008 to 2014, a simulation test was conducted on all relevant paths, and the influence coefficient of each path by the application of AMOS was analyzed on the basis of structural equation modeling (SEM)Results indicate that, FDI exerts a positive impact on upgrading the industrial structure Technological progress is the optimal path for the upgradingOptimization of investment structure can largely promote the upgrading of industrial structure in spite of the fact that FDI at present only exercises a limited effect on the promotion of investment structure Besides, the contribution of FDI to the upgrading through the improvement of consumption structure is insignificant and has little marginal effect

Key words: FDI, industrial structure upgrading, path analysis, SEM