BEIJING, June 8 (Xinhua) -- China and Serbia have signed a bilateral pact on social security, agreeing on favorable terms to better protect the social benefits of workers.

The agreement was signed Thursday in Belgrade, according to a statement released Friday by China's Ministry of Human Resources and Social Security.

Under the agreement, Chinese employees of Chinese companies working in Serbia will be exempt from pension and unemployment insurance contributions in Serbia, while Serbian companies and Serbian employees will enjoy the same treatment in China.

The pact will help avoid double insurance contributions and reduce investment costs of companies of both countries, and foster the development of bilateral economic and trade ties, the statement said.

The agreement will take effect after completing necessary legal procedures in each country.