Analysis on the Trade Effect of China-Chile Free Trade Zone by Gravity Model

In recent years,the process of regional economic integration has continued to accelerate,which is the inevitable result of the development of world economy.Along with the development of economic and trade relations between China and Latin America,China has signed a free trade agreement with three Latin American countries-Chile,Peru and Costa Rica,which has brought considerable income for both sides of the trade,and greatly promoted the process of China’ s participation in regional economic integration.On the basis of the reviews on the related literature at home and abroad,this paper adopts the Free Trade Agreement between China and Chile as an example,to study quantitatively the economic integration between the two countries as well as the trade effect created by the regional economic integration,by using the gravity model.