Cross-border investment between South Korea and China is on a steep rise, data showed Wednesday, apparently boosted by the countries' bilateral free trade pact.

In the first five months of the year, new South Korean investment that arrived in China came to US$2.2 billion, up 12.2 percent from the same period last year, according to the data from the Korea International Trade Association.


The amount surpassed Japan's $1.47 billion investment arriving in China over the cited period. South Korean investment in China surpassed that of Japan for the first time in 2015.

"There are growing efforts between South Korea and China to develop new business opportunities based on their free trade agreement," a KITA official said. "Also, the focus of such efforts is shifting from the manufacturing sector to the service industry."

The Korea-China FTA went into effect in December 2015.

South Korean investment in China had been on a steady decline after peaking at $6.25 billion in 2004. The amount began rebounding shortly after the two countries declared the start of negotiations for a bilateral FTA in 2012.

KITA estimates South Korean investment in China will likely reach $5.3 billion this year, spiking over 31 percent from $4.04 billion in 2015.

Chinese investment in South Korea also has been on a steep rise, reaching a record high of $1.98 billion last year.

In the January-May period, Chinese investment that arrived here jumped 79.5 percent on-year to $710 million, according to KITA. (Yonhap)