Persisting in opening up and achieving coordinated development of economy, society, and ecology is China's major strategies for achieving sustainable urbanization. Ecological efficiency is a reasonable indicator to measure the development level of a circular economy. Therefore, using the statistical data of 30 provinces in China from 2004 to 2016, this paper uses the super-efficiency SBM model that considers undesired output to measure the eco-efficiency value, which is used to measure the level of circular economy development in each province. Based on this, a panel model is constructed to test the impact of circular economy and FDI on urbanization. The empirical results show that (1) there is a complex nonlinear relationship between the development of circular economy and the advancement of urbanization, and the shape of the curve varies with areas; (2) FDI under environmental regulation is conducive to promoting China's urbanization to achieve green, effective, and sustainable development; and (3) the development of the tertiary industry, human resources, innovation capabilities, and employment situation is conducive to promoting China's urbanization. Finally, based on the empirical results, this paper puts forward policy recommendations to achieve green, efficient, and intelligent development of Chinese cities by promoting the development of a circular economy and strengthening FDI screening.
Keywords: Circular economy; Ecological efficiency; Environmental regulation; Foreign direct investment; Urbanization.