​China faces a problem of industrial upgrading and transformation. Foreign direct investment is an effective way to promote the development of the high-tech service industry, and thereby to help solve this problem. As such, it is important to quantitatively examine the relationship between FDI and the high-tech service industry. This thesis first reviews the economics literature on FDI and the high-tech service industry. Second, based on the development status of the high-tech service industry and the present situation of FDI both at home and abroad, it conducts an analysis of FDI demands in China. For that purpose, Chinese provincial data from 1984 to 2015 are used in a cointegration test to study the relationship between FDI in the service sector and the growth of the high-tech service industry. The results show that there is long-term equilibrium between them. This thesis also introduces four instrumental variables to further assess the impact of FDI on the high-tech service industry, showing that FDI in the service sector influences capital accumulation, technological progress and trade, and that these three instrumental variables then affect the economic growth of China's high-tech service industry. Finally, this thesis provides some suggestions on how to attract FDI to China and how to develop its high-tech service industry. Preferential policies should be formulated to lead foreign investors to the high-tech service industry. China should also gradually relax its regulations on foreign enterprises entering China. Most importantly, China's domestic high-tech service industry should be upgraded to become more competitive in terms of attracting subcontractor service projects from multinationals and developed economies.