Since China's opening to the outside world a large amount of foreign investment has flowed into the country. The domestic economy has been full of vigor and vitality after adopting the socialist market economy, which contributes to a higher economic growth. However, ecological environment has a close relationship with the foreign economic development. The good ecological environment and natural resources are the foundation of foreign economic development. With the expansion of its market economy, China is confronted with a series of sustainable development challenges related to population, resources and environmental protection, etc. How we should prevent and control effectively the impact of economic development upon the environment and avoid serious effect and damages on environmental quality are the key points this paper will discuss.