The leaders of China and South Korea have reached broad agreement on a free-trade deal that would allow Korean firms enhanced access to China’s huge market and mark a diplomatic victory of sorts for Beijing.

Chinese President Xi Jinping and Park Geun-hye of South Korea signed the outlines of a deal Monday and plan to reach a final agreement in 2015, South Korean officials said. The pact would need ratification by each country’s legislature to take effect.

Chinese officials and state media called it “the conclusion of substantive negotiations” rather than a final agreement, but heralded it as significant.

The tentative deal is a coup for Mr. Xi, who is hosting world leaders, including President Barack Obama, at a regional summit in Beijing. By reaching agreement, even a preliminary one, China is signaling a challenge to the U.S.’s economic power, economists said.

In welcoming President Park on Monday, China’s Mr. Xi said that the free-trade agreement was further evidence of their countries’ strategic partnership and “will promote the integration of the Asia-Pacific region.”