BANGKOK: China has signed a pact to protect foreign direct and portfolio investment, as well as to offer compensation for damage caused during riots and political disturbances.

It is the third free trade agreement (FTA) the country has signed with the 10-member Association of South East Asian Nations (ASEAN) and could prove a major step towards broader economic cooperation.

The deal, which also eases restrictions on equity ownership and land acquisition, marked the end of negotiations over the China-ASEAN Free Trade Area, which is to be realized by Jan 1.