President Hu Jintao and visiting Icelandic President Olafur Ragnar Grimsson witnessed the signing of four agreements in Beijing Tuesday to promote trade and cooperation in environmental protection, earthquake and aviation issues. 

Hu said Iceland was the first European country to grant China full market economy status, saying Sino-Icelandic relations had set a good example in building friendly links between countries with different social systems and economic development.

Hu encouraged two-way investment, saying he would like to see more cooperation in the fields of transportation, telecommunications, finance and the environment.

Both presidents agreed to conduct a joint feasibility study in preparation for a possible Free Trade Zone between the two countries. Minister of Commerce Bo Xilai and his Icelandic counterpart signed an agreement in early May, a prelude to negotiations for free trade.

Grimsson has brought with him the biggest-ever trade mission for the weeklong state visit, which started on Monday.

The business delegation, consisting of 200 people from 105 companies, represents a wide range of sectors including finance, tourism and high-tech.

Yang Li, a trade official of the Icelandic Embassy in Beijing, said the visit will help business people access the Chinese market and "presents an excellent opportunity for them to understand the local market."

"We can have teamwork in many areas ... and we want to bring more and more Chinese students to our country," Grimsson said.

While seeking alternative sources of technology and energy, China and Iceland will also sign an agreement on geothermal cooperation today.

A joint company will be established at the end of the year to develop local geothermal resources in Xianyang, an ancient city in northwest China's Shaanxi Province.

According to Yuan Peiqi, a local land and resource bureau official, Xianyang has the richest geothermal resources in the west of the country.

Prior to meeting Hu, Grimsson visited Ameco Beijing, who signed a deal on aviation cooperation with Air Atlanta from Iceland, involving more than US$15 million.

According to the agreement, the Beijing-based aircraft maintenance and engineering company is expected to overhaul 11 Boeing 747s for the carrier before the end of 2006.

"The partnership between Ameco and Air Atlanta is of great significance as it is the foundation of our global aviation expansion," Grimsson said.

(China Daily May 18, 2005)