China and New Zealand signed a historic free trade agreement on Monday, making the island nation the first developed country to ink such a deal with China.

The deal was signed by Commerce Minister Chen Deming and his New Zealand counterpart Phil Goff at the Great Hall of the People. Chinese Premier Wen Jiabao and visiting New Zealand's Prime Minister Helen Clark also attended the signing ceremony in Beijing.

Premier Wen stressed the significance of the deal.

"It makes New Zealand become the first developed country to sign a free trade agreement with China."

Trade between China and New Zealand currently totals more than 6.1 billion US dollars each year, with Chinese exports making up about 75 percent.

When the deal goes into effect on 1 October, New Zealand exports to China that now face tariffs of 5 percent or less will be cut to zero.

Beyond commodities trading, the agreement also covers services from insurance and banking to education and labor.