Formal ties between China and Iceland began in December 1971, with Iceland’s recognition of the government in Beijing. While early contact was modest, the relationship gained traction in recent decades through trade, renewable energy, scientific research and education. As one of the smallest members of the European Economic Area, Iceland now stands out as an unlikely but important bridge between East Asia and the North Atlantic.
The rise of diplomatic and economic cooperation
Ambassadors became central to the growing connection between the two states. China posted its first resident ambassador to Reykjavík in 1972. Iceland, for its part, opened an embassy in Beijing in 1995, creating its only diplomatic mission in Asia, responsible for relations with several countries in the region. China has maintained an embassy in Iceland since 1995, supporting a staff of officially five diplomats. Both states have used their embassies as platforms for wide-ranging exchanges and joint projects.
Before 2013, economic ties between the two countries were limited, with fisheries products making up the bulk of Iceland’s exports to China. However, trade grew rapidly in the years prior to a landmark free trade agreement. In 2012, China accounted for more than 7% of Iceland’s imports and was the largest Asian trading partner for Iceland. Icelandic exports to China, mainly seafood, rose steeply in the early 2010s.
A pivotal moment came in April 2013, when the foreign ministers of both nations signed a free trade agreement, the first that China concluded with a member of the European Economic Area. This accord eliminated tariffs on nearly all industrial products from China and on the majority of Icelandic goods exported to China. Some tariffs for Icelandic exports were set for gradual removal over a period of up to ten years. In the aftermath, economic and political cooperation deepened as Iceland supported China’s ambitions in renewable energy development, particularly through Icelandic expertise in geothermal projects.
Cultural exchanges and scientific collaboration
Beyond commerce, cultural and academic connections have also flourished. Tourism between the countries has been notable, with Chinese visitor numbers to Iceland multiplying tenfold from 2006 to 2019. By the latter year, Chinese tourists accounted for 5% of all international arrivals in Iceland.
Educational ties have expanded as well. In 2019, Iceland and China signed an agreement to recognise each other’s university qualifications, supporting student exchanges and teaching partnerships. The University of Iceland offers courses in Chinese language, while since 2006, Beijing International Studies University has made Icelandic language available to Chinese students. Exchanges remain relatively small but are expected to increase under the new agreement.
Joint scientific research serves as a distinctive aspect of the partnership. In 2018, a research observatory for Arctic and space studies opened in northern Iceland, developed by an Icelandic organisation and China’s polar research institute. The site is used for atmospheric research and satellite observations. Cultural collaborations have seen the establishment of a poetry fund and several shared literary events, with support from both Chinese and Icelandic partners.
Strategic cooperation has also been visible during times of crisis. After the 2008 financial collapse in Iceland, China provided support, including a currency swap agreement and goodwill gestures that helped Iceland through its economic recovery. High-level visits and memoranda have broadened areas of direct collaboration, including geothermal energy, Arctic dialogue, and institutional consultancy.
