(Yicai Global) April 2 -- China's recently passed foreign investment law will boost South Korea's economic reform, according to the president of a South Korean governmental think tank. 

China's opening-up, and particularly its new foreign investment law, will bring confidence and opportunities to many South Korean companies in China, Jae-Young Lee from the Korea Institute for International Economic Policy said in an exclusive interview with Yicai Global.

The legislature of the National People's Congress passed the bill early last month, with an aim to prepare a more equal playing field for foreign firms. The law will come into effect on the first day of next year. 

Besides the new rules, the newly started tradition of the China International Import Expo will also accelerate the nation's opening-up, which will benefit East Asian countries, such as South Korea, that rely on foreign trade, Lee added. Nearly 300 South Korean firms participated in the first CIIE last year, making the country the second-largest source nation.

China and South Korea penned a free trade deal in 2015, which has reduced tariffs and laid a foundation for stable trade relations, according to Lee. However, the agreement could be developed further in terms of service investment, he added.

South Korea is China's largest importer, according to Chinese customs data. The two countries' bilateral trade increased by nearly 12 percent to USD313.4 billion last year. South Korean goods shipped to China made up almost two-thirds of the sum. 

This year has been more sluggish though, as South Korea's global exports decreased over 8 percent last month, falling for the fourth month in a row, governmental data show. Analysts suggested that the drop was caused by fewer exports of semiconductors and weakening demand from China, Chinese news portal Sina reported.

The goals of Beijing's Belt and Road initiative and Seoul's New Northern Policy align, according to Lee. President Moon Jae-in started to promote this geopolitical strategy in 2017 to bring peace to the Korean Peninsula as well as to improve South Korea's economy. Belt and Road initiative is President Xi Jinping's investment plan to rejuvenate connections between the former Silk Road nations. 

Editor: Emmi Laine