China signs first free trade agreement with EU state

Iceland became the first European country to sign a free trade agreement with China, the world's second largest economy.The China-Iceland free trade pact will lower tariffs on a range of goods such as sea food, one of the main exports of the remote Nordic state.In return it will give Beijing a leg up in its drive for expanded influence in the Arctic, RT reported.China is keen to extend its influence in the region, as summer sea ice melts shipping via the Artic could cut two weeks off a journey between Europe and Shanghai.China is also seeking access to the Arctic's rich mineral deposits.Trade between China and the tiny island country of 315,000 people rose last year to $180mln.Iceland's economy took a battering after the financial crisis in 2008 and the agreement with China is the latest attempt to diversify.