This paper uses a unique dataset covering 1998 to 2007 to evaluate the impact of economic complexity on the location of foreign direct investment in China. Results show that the amount of knowledge embedded in an industry is a key determinant to attract FDI. The findings also confirm the presence of agglomeration economies and this effect is more likely for non chinese foreign firms. The results are robust to different alternatives in the location decision, different sub-sample, to the inclu-sion of control variables such as those for industry linkages and others traditional determinants of FDI attraction.