Referring to Jeffrey Wurgler’s model of capital allocation efficiency, the paper empirically estimates how government intervention and economic openness affect FDI allocation efficiency of the service industry, using the data from 2005 to 2014.Conclusion are as follows: FDI allocation efficiency is higher in the service industries whose government intervention is of lower level and economic openness is of higher level,while it is lower in the service industries whose government intervention is of higher level and economic openness is of lower level.