Abstract: As China’s economy enters a stage of high-quality development, improving pollution emission efficiency and advocating energy conservation and emission reduction are important measures to achieve high-quality economic development. Based on the dual perspectives of local government competition and FDI, this paper incorporates local government competition, FDI and pollution emission efficiency into a unified analysis framework. On the basis of theoretical analysis, and panel data of 30 provinces in China from 2000 to 2017, combined with panel Spatial Durbin model and panel threshold regression model, empirical analysis of the relationship and spatial effects among local government competition, FDI and pollution emission efficiency are analyzed. The results show that: China’s inter-provincial pollution emission efficiency has obvious spatial correlation. The impact of local government competition on pollution emission efficiency has the dual effects of “competition to the bottom” and “competition to the top”. The impact of FDI on pollution emission efficiency meets the “pollution halo” hypothesis. The interaction between the two is conducive to the improvement of the pollution emission efficiency of the local area, but it hinders the improvement of the pollution emission efficiency of neighboring areas through “beggar thy neighbor”. Further research has found that FDI has a threshold effect, and only by appropriately introducing high-quality FDI can the role of local government competition in energy conservation and emission reduction be fully brought into play. Based on this, it is necessary to further improve the performance evaluation mechanism, enhance the quality of attracting investment, and improve the efficiency of pollution emissions in order to promote the high-quality development of the Chinese economy.