BEIJING -- Iceland became the first European country to sign a free trade agreement with China on Monday, as Beijing looks to gain a foothold in the strategic Arctic region.
The deal is expected to expand trade between the world's second-largest economy and the north Atlantic state, which suffered an economic meltdown in 2008.
The agreement was signed during a visit to Beijing by Icelandic Prime Minister Johanna Sigurdardottir, and follows six years of talks between Reykjavik and Beijing.
"This is a major event in China-Iceland relations," Chinese Premier Li Keqiang said. "It also signals the deepening of our relationship, especially our economic relationship, which has been lifted to a new height."
A proposal by a Chinese property tycoon to 115 square miles of land in Iceland became embroiled in controversy and was blocked by Reykjavik in 2011.
China has said it would like to play a larger role in the Arctic.
It has applied for permanent observer status on the Arctic Council, an eight-member body including Iceland that meets to discuss matters concerning the area.
Copyright Agence France-Presse, 2013