China and South Korea signed a “substantial conclusion” of a free trade agreement on Monday, which is aimed to largely remove trade barriers between the two countries, according to Reuters.

South Korea is upbeat that the reduction in the import tariffs will make the country’s clothing, leisure and high-end electronics manufacturers become competitive in China.

South Korea focused on small and medium-sized businesses instead of matured markets like steel and petrochemicals, the country's official said.

The deal was inked by Chinese President Xi Jinping and South Korean President Park Geun-hye, and is now subject to legal and parliament reviews in the two countries.

According to a domestic news site, the free trade agreement is predicted to benefit the traffic and transport industry on a long term basis.

Shipping is the major trading mode between the two countries, so the port and shipping will gain a lot from the deal, the domestic news report said.