The signing of the Protocol on Free Trade Agreement between China and Chile is an important measure to promote the establishment of a free trade zone, and updates the trade arrangements between the two countries. The Protocol includes trade in goods, trade in services, investment, competition, and e-commerce etc. Up to 98% of zero-tariff products, the introduction of electronic certificates of origin, highly transparent custom procedures and a widely open service trade system constitute the highlights of the upgrade protocol. After the implementation of the Protocol, the cooperation between the two countries in the fields of agricultural products, telecommunications, new energy and manufacturing. is bound to be qualitatively improved. This will not only enhance the economic and trade relations between the two countries and optimize the existing investment structure, but also have a positive impact on China’s economic cooperation in Latin America. At the same time, in view of the differences in the cultural background of the two countries, Chinese companies must effectively guard against investment risks in the field of environmental protection in Chile and follow best compliance practices.