China and Iceland signed a free trade agreement on Monday boosting Beijing's presence in an Arctic region that world powers are looking at for new shipping routes, minerals and oil. The deal signed in Beijing aims to abolish tariffs between an island of 320,000 people and the Asian powerhouse of 1.2 billion. Iceland's exports to China, mainly seafood, rose 40 percent last year to about $61 million, the Icelandic government said in a statement announcing the agreement.
While the deal may boost Iceland as it recovers from a 2008 economic crash, the agreement is likely to be seen also as a symbolic push by China into the Arctic. The Arctic has big reserves of oil, gas, gold, diamonds, zinc and iron. And with global warming melting polar ice, it may offer new shipping routes - and naval interests - for trade between Asia, Europe and North America's east coast.