Deteriorating Sino-Japanese ties over the Diaoyu Islands and the festering tension between Japan and South Korea over a pair of islets in the Sea of Japan has adversely affected investment in Northeast Asia, a senior trade official said.

Meanwhile, a two-way trade pact between China and South Korea is likely to see prolonged progress, the official said, while a trilateral free trade negotiation among the region's three major economies was announced on Tuesday in the 7th East Asia Summit in Cambodia.

Hwang Jae-won, deputy head of the China branch of the Korea Trade-Investment Promotion Agency, or KOTRA, made the remarks in an exclusive interview with China Daily.