Chinese Prime Minister Wen Jiabao has been visiting Iceland on the first stop of a four-nation European tour. He was set to meet Chancellor Angela Merkel in Germany on Sunday.
The Chinese premier's visit to Iceland, ahead of visits to Germany, Poland and Sweden, was largely focused on energy issues and the Arctic region.
Wen held talks with Icelandic President Olafur Ragnar Grimsson on Saturday, thanking his host for backing Beijing's request for permanent observer status on the Arctic Council.
Talks with Icelandic Prime Minister Johanna Sigurdardottir on Friday had resulted in agreements to cooperate on energy and science projects in the region.
Currently, China only has simple observer status on the eight-nation inter-governmental forum, comprising Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia and the United States.
As a trained geologist, Wen also toured the Thingvellir national park, home to popular tourist attractions the Gullfoss falls and the Geysir geyser.
While visiting a geothermal plant, the premier voiced "strong support" for efforts to tap geothermal energy back home in China.
A deal already exists between Iceland's Orka Energy company and the Chinese firm Sinopec, to develop geothermal energy in China.
Chinese interest in Iceland came to light when Chinese property magnate Huang Nubo tried to buy a large portion of land in the north of the country. Suspicion was voiced that the purchase might help China win a foothold in the region and the deal was eventually blocked by the Icelandic government.
On Sunday, Wen was set to attend the world's biggest trade fair, the Hanover Messe, with Chancellor Angela Merkel. China is Germany's official partner at this year's four-day fair to showcase industrial technology.
rc/av (AFP, Reuters)