Chinese Premier Wen Jiabao signs agreements on energy, Arctic during Iceland visit

Chinese Premier Wen Jiabao signed agreements on energy cooperation and the Arctic during a visit to Iceland today, as he kicked off a European tour that will also take him to Germany, Sweden and Poland.

Wen’s decision to make his first stop in Iceland – which has a population of just 320,000 — has fuelled concerns that Beijing wants to take advantage of Reykjavik’s financial woes to gain access to rich deposits of oil, gas, diamonds, zinc and iron in the North Atlantic and Arctic region, Reuters reported.

A wealthy Chinese developer is fighting an Icelandic government decision last year to stop him buying a large tract of land on which he planned to build a luxury resort, amid speculation it was a cover to gain a strategic foothold in the region.

Melting polar ice has made the area’s natural resources more accessible and may also open up new shipping routes that would shorten the sea voyage between Shanghai and northern Europe by 4,000 miles, Agence France-Presse reported.

Wen’s two-day stopover in Iceland is the first official visit by a Chinese premier since diplomatic relations were established 41 years ago, Bloomberg said, citing the Chinese foreign ministry.

During talks between Wen and Icelandic Prime Minister Johanna Sigurdardottir earlier today, the two sides agreed to cooperate in the Arctic region, in marine and polar science and in geothermal energy, Reuters said.

AFP said Beijing was also seeking permanent observer status on the Arctic Council, an intergovernmental forum promoting cooperation among eight states bordering the region.

Wen is also expected to discuss the ongoing euro zone crisis with his European counterparts and may also face a grilling on China’s stance on violence-hit Syria.