Abstract:     Since China′s accession to the WTO in 2001, it has achieved deep integration with the global economy. Inward Foreign direct investment (IFDI) and Outward foreign direct investment (OFDI) have shown a sustained and rapid growth trend. By the end of 2017, China has become the second largest IFDI and the third largest OFDI economy in the world. The 19th National Congress of the Communist Party of China clearly put forward the development strategy of "bringing in" and "going out", and emphasized that IFDI and OFDI should develop in coordination. However, with the deepening of China′s opening up, the increasingly prominent environmental pollution problem has become an important factor restricting the high-quality economic development and social welfare improvement. IFDI and OFDI are primary avenues for opening to the world and embedding into the global value chain; hence, their coordinated development has become one of the important strategies for China′s current and future opening-up strategy. 
   This paper innovatively combined Inward Foreign Direct Investment (IFDI) and Outward Foreign Direct Investment (OFDI) as a two-way FDI coordinated development to measure the coupling and coordination level of FDI. Under the analytical framework of Copeland and Taylor (1994), it introduces the new measure to investigate its effects on China′s carbon emissions during 2004-2016 from the two-dimensional perspective of time and space using the dynamic spatial panel model and the system GMM method. The contributions of this paper are as follows: (1) Based on the objective fact of the interactive development of the two-way FDI, IFDI and OFDI are integrated as a measure for representing the level of coupling and coordination development to master the internal interaction mechanism of the two-way FDI. (2) Based on China′s inter-provincial carbon emissions data released by China Emission Accounts and Datasets (CEADs), we analyzed the impact of two-way FDI on carbon emissions from the dual dimensions of time and space by using the dynamic spatial panel model. (3) The mechanism of two-way FDI on carbon emissions, is divided into a scale effect, composition effect, and technique effect. Based on the mediation effect model, the path of the conduction mechanism of carbon emission in the coordinated development of two-way FDI is deeply investigated.
The results found that China′s carbon emissions show significantly spatial-correlation characteristics and path dependence, which indicating that regional coordinated cooperative governance and long-term governance is the key to the carbon emission mitigation in China. China′s two-way FDI coordinated development has presented a significant braking effect on carbon emissions during the research period. Decomposing the effects of the two-way FDI on carbon emissions into three parts, it showed that the scale effect is positive, while both the composition and the technique effects are negative. The composition and technique effect essentially dominated the emission reduction induced by the coordinated development of the two-way FDI. This paper suggests that the Chinese government should pay attention to the development strategy of "bringing in" and "going out", promoting the positive interaction of two-way FDI, and giving full play to the structural and technological effects of emission reduction. This research also provides some useful guidance for policy makers to effectively control emissions by implementing economic means.
    The coordinated development of two-way FDI has significant emission reduction effects, which implies that the effective coordination of the process of introducing foreign investment and overseas investment can help mitigate carbon emissions. Therefore, the government should actively promote the scale of IFDI and OFDI while promoting the coordinated development level of the two, which is the path to promote the improvement of China′s environmental quality. In view of the unbalanced regional development of the two-way FDI, the government should accelerate the coordinated development of the "the Silk Road Economic Belt and the 21st-Century Maritime Silk Road" and "Yangtze River Economic Belt" in the future, and continue to deepen the implementation of regional development strategies such as "western development strategy" and "the Rise of Central China strategy". At the same time, the government should gradually expand the level of opening-up in the central and western regions, and promote the scale growth of IFDI and OFDI in the central and western regions with the help of policy guidance and improve the coordinated development level of them, which is of great significance to achieve the improvement of China′s overall environmental quality. 
      The scale effect, structure effect and technology effect of the coordinated development of two-way FDI are the channels to exert its carbon emission reduction effect, and the scale effect restrains carbon emission reduction, while the structure effect and technology effect play a promoting role, and the structure effect and technology effect play a leading role. Therefore, while promoting the coordinated development of two-way FDI, the government should further tap the carbon emission reduction effect of industrial restructuring and technological progress. In this regard, the government should guide the IFDI to the advanced manufacturing, strategic emerging industries and high-end service industries with low pollution costs through supply-side structural reforms. Secondly, the government should actively expand the international production capacity cooperation industry and regional scope to promote domestic industrial transformation. In the end, while promoting the growth of OFDI, the government should continue to encourage Chinese companies to invest in foreign high-tech industrial projects, and promote domestic industrial technology upgrades and clean technology development through reverse technology spillovers. In addition, considering that the scale effect has a strong inhibitory effect on carbon emission reduction, the government should also take the development of high-quality economy as the guide, and use the two-way FDI to promote economic scale growth while realizing the development of environmentally friendly industries under economic scale growth.
    China′s carbon emissions have significant spatial and path-dependent characteristics, which means that relying on local "localism" and single actions will not help China′s overall environmental quality. In terms of space, more local government coordinated governance mechanisms such as the coordinated development of Beijing-Tianjin-Hebei and the development of the Yangtze River Economic Belt should be established to enhance the synergy of environmental governance; in time, environmental governance investment should be established. The long-term mechanism, through financial guidance, green finance, tax incentives, carbon emissions trading and other means, encourages polluting entities to increase environmental governance inputs and clean technology use, and restricts pollution emissions through strong environmental regulations.

Key words: two-way FDI, carbon emission, inward foreign direct investment (IFDI), outward foreign direct investment (OFDI)