It is considered that Foreign Direct Investment(FDI)has an important role for economic growth and economic development in particularly developing countries.In t investment cooperation.It has become axiomatic that sustainable economic development is impossible without the effective participation in global economic processes,including those without the active involvement of Foreign Direct Investment(FDI).Mongolia is a one of the fastest growing country in the world and like any other developing countries;nowadays FDI is one of the important factors in the economic development of Mongolia.This country has rich natural and mineral resources and recently has discovered worlds one of biggest copper-gold ore and become one of the top FDI attracting countries in the world.In order to use its resources efficiently,authorities need to study from others experience,not to repeat their mistakes but ought to learn from their success.After the institutional reforms since the early 90 s,Mongolia’s economy went down year after year,until 1994,the economy began to rebound,but economic growth remains slow and with little domestic capital accumulation The Mongolian government to take a lot to attract foreign direct investment policies to promote the national economic development.Mongolia’s rich natural resources and the continuous developing of large national strategy mineral Resources of example like Oyu Tolgoi,are attracting more and more Chinese enterprises to directly invest in Mongolia.From the analysis and evaluation to conclusion of the investment environment in Mongolia the current investment environment is better,but in many other aspects of stability of policies,infrastructure,legal sophistication,public awareness existence uncertainty risk.China and Mongolia are neighbors,and over the years has been a policy of friendship.In recent years,the political,economic and cultural cooperation of two countries have seen significant development,and the two countries continuously expand mutually beneficial cooperation,Mongolia has become an important destination for foreign direct investment,while China has become Mongolia’s first largest trading partner and largest foreign investor.China’s direct investment in Mongolia involved in all walks of life,also on the Mongolia’s employment and the level of the international balance of payments and industrial upgrading have had a positive benefit.But nowadays,China’s direct investment in Mongolia will be actively taking steps to improve the effectiveness of China’s direct investment in Mongolia.In this thesis I wanted to introduce important theories about FDI that have been studied many years and the one of most important thing is relationship between trade and foreign direct investment without international trade investment can’t directly increase,also Foreign Investment will face possible risks like Political and Natural risks that has occurred over the years in order to study and learn from it.Major of thesis is how to increase Chinese direct investment in Mongolia and what risks,opportunities they had.In this thesis analyzes the impact of China’s Mongolia direct investment on the scale and structure of bilateral trade between China and Mongolia.Also Shown Internal and External risks,and opportunities to Invest in Mongolian industry.