As the industrialization process continues to accelerate, the China’s economy develops at a full speed. Unfortunately, it also arises a series of environmental pollution problems, and the pressure on resources and environment has become increasing severe. Chemical pollution has restricted residents to safely enjoy many benefits attributable to economic development. We should intensify the investigation on the relationship between chemical pollution and economic development since it indeed has important theoretical and practical implications. This paper uses panel data to positively analyze the relationship between the above two by establishing a simultaneous equations model. The findings show that the China's industrialization process accelerates in pace with dramatic development in the economy, which exacerbates the environmental pollution problems. The emissions of “three wastes” shows an upward trend year by year. The regression results from the chemical pollution equation show that the chemical pollution has a linear relation with the regional economic development. A significance test also passes. The regression results from the output equation show that the various indicators for chemical pollution all have a significantly negative impact on regional economic development, which suggests that the economic growth will be stunted with the increase in chemical pollution emissions; physical capital stock, human capital stock and labor inputs also play a significantly positive impact on the regional economic growth, which shows that these three can effectively drive the development of regional economy.