South Korea expected the planned free trade deal with China to raise the nation's gross domestic product (GDP) by around 1 percent within 5 years after the deal will take effect, the finance ministry said Wednesday.

The Ministry of Strategy and Finance estimated in a press release that the planned free trade agreement (FTA) between the two countries would help South Korea increase its real GDP by 0.95 percent to 1.25 percent within five years after the agreement will be effective.

The real GDP of the Asia's No.4 economy was forecast to expand by 2.28 percent to 3.04 percent 10 years after the deal will be implemented, according to the ministry.

The potential FTA was projected to create new jobs of between 190,000 and 250,000 within five years, while 240,000 and 330,000 jobs were estimated to be created 10 years after the deal is implemented, the ministry said.

The estimation came after China's Commerce Minister Chen Deming and South Korean Trade Minister Bahk Tae-ho announced Wednesday in Beijing the formal beginning of negotiation for setting up the bilateral FTA.

The finance ministry said that China is South Korea's largest trade partner and the world's No. 2 economy, noting that if the bilateral FTA is implemented, it will generate positive effects equivalent to the already-implemented free trade deals with the United States and the European Union (EU).

Bilateral trade between China and South Korea reached 220.6 billion dollars in 2011, higher than 100.8 billion dollars with the US and 103.1 billion dollars with the EU.