Chinese Premier Wen Jiabao is welcomed by Icelandic Prime Minister Johanna Sigurdardottir upon his arrival in Reykjavik, Iceland, on Friday.[Wang Ye/Xinhua]

China and Iceland will seek to strengthen arctic cooperation, when Premier Wen Jiabao meets his Icelandic counterpart Johanna Sigurdardottir on Friday at the start of a two-day visit, the first ever by a Chinese premier to the country.

"I believe that with joint efforts, Sino-Icelandic relations are bound to reach new heights and benefit the peoples of the two countries,"Wen said upon his arrival in the Icelandic capital of Reykjavik.

Sources say an intergovernmental framework agreement on arctic cooperation will be signed, along with the creation of a mechanism for dialogue and joint efforts on arctic affairs.

Official figures show that Sino-Icelandic trade totaled $150 million. Beijing aimed to "significantly" boost that amount and overall cooperation with Iceland through Wen’s visit, Deputy Foreign Minister Song Tao said.

The leaders were also expected to exchange views about signing a free trade agreement, said Jiang Yaoping, deputy minister of commerce.

Iceland was the first European country to recognize Beijing's full market economy status and the first European country to start FTA talks with China.

Wang Ronghua, a former Chinese ambassador to Iceland, told China Daily that the signing of a bilateral FTA will lower prices in bilateral trade and benefit exporters of both countries.

"Iceland's fishery products, including cod, will find easier access to China at lower prices if the FTA is finally signed. The country currently is dependent on Chinese exports in a series of sectors,"said Wang.

If signed, the FTA will also show other European countries a promising trade future with China, Wang added.

Wen’s visit is the first by a Chinese premier since China and Iceland established diplomatic relations in 1971.

"The visit is expected to exert long-term influence on beefing up bilateral governmental cooperation,"said Wang.

Iceland is rich in marine resources, and the visit will consolidate ideas on their use, the former ambassador added.

Icelandic President Olafur Ragnar Grimsson said earlier that Beijing sees his country as its "primary partner" in geothermal energy transformation.

"This is due to our knowledge, our research, and the demonstration of what can be done. It proves that you can, on a small scale, develop a new way of dealing with things, and you can move it over the biggest country on Earth, and scale it up, beyond what anybody could have expected, "Grimsson told global innovation network PopTech last October.

Wen was scheduled to meet Grimsson on Friday after talks with the Icelandic prime minister and witnessing the signing of a series of deals.

Wen will visit a number of scenic spots on Saturday before going to the Hellisheidi geothermal plant,  25 kilometers southwest of Reykjavik.

Iceland is the first leg of an eight-day European trip for Wen. On Sunday, the Chinese leader will depart for Germany to attend the Hannover Messe, the world's leading industrial fair. He will address the fair’s opening ceremony with his German counterpart Angela Merkel.

Wen will also visit Sweden and Poland.

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