Abstract: The establishment of the pilot Free Trade Zone provides a rare opportunity for Yunnan to further expand its opening to the outside world, and will also become a new engine to drive local economic development. The monthly panel data of 13 provinces in China government expenditure, fixed asset investment, and total retail sales of social consumer goods were selected by using the composite control method, selects to evaluate the effect of the establishment of Yunnan Free Trade Zone on local economy by calculating the real and predicted values of various economic variables of "real Yunnan" and "composite Yunnan" before and after the establishment of Yunnan Free Trade Zone. The results show that the establishment of the free trade zone has significantly promoted government expenditure and played a positive role in stimulating investment and consumption.

Key words: Free Trade Zone, economic effect, synthetic control method, Yunnan