More than 40 percent of China's service sector has remained closed despite a bilateral free trade agreement with South Korea, a report said Thursday, suggesting the Seoul government should do more to open the neighboring market in upcoming trade talks with Beijing.

The Korea-China FTA took effect in December 2015 after years of negotiations, with tariffs on about 90 percent of goods to be eventually removed over the next two decades.

At the time, the two sides agreed to launch additional negotiations to upgrade the pact two years after implementation. It is forecast that talks could begin later this month after the presidents of the two countries hold a summit in Beijing next week.

The Seoul-based Hyundai Research Institute said in its latest report that the South Korean government should focus more on the Chinese service industry, which the current FTA did not fully open for South Korean businesses.

It noted that South Korean companies are not allowed to do business in China's 65 service areas, or 41.9 percent of the total, including research and development and maintenance services for transportation equipment.

"South Korea needs to take aggressive stance on the Chinese service industry, which has relatively low market openness," the HRI report said. "Through additional negotiations, the government has to call for tools to help South Korea firms enter the Chinese market." (Yonhap)