China is one of the countries to which foreign direct investment inflows most. And about 2/3 FDI is poured into Chinese manufacturing industry. The paper investigates the spillovers of foreign direct investment (FDI) on the Chinese manufacturing industry. And it compares and differentiates the spillovers of intra-industry and inter-industry. The paper also respectively studies the different effects produced by different types of FDI (FDI from Hong Kong, Taiwan and Macau and FDI from western countries and Japan) on local firms and researches the difference existing in the benefit degrees of different types of local-owned Chinese firms. The spillovers of different extent of foreign presence were also analyzed. Finally some relative policy suggestions were proposed on the basis of the analysis.