Beijing has begun to play a proactive role in the affairs of the Arctic seeking permanent observer status in the Arctic Council and has also made strong overtures towards some of the Arctic states by extending its domain and influence into the region through its assiduous diplomacy and grand strategy to nurture and sustain cordial bilateral relations.
The economic bailout package and the speed with which China salvaged Iceland when its economy was on the verge of collapse have created a new constituency in Iceland government circles who look at China favourably.
China’s motivation for the nurture of its relationship with Iceland also emerges from the strategic rationale to find a foothold along the trans-Arctic-Atlantic shipping route between Asia and Europe/North America in case the Arctic becomes navigable for longer duration through the year.
There is also a speculation that China is keen to establish its naval foothold in the Atlantic by setting up a signal intellihgence station in Iceland. In the past, China has been proactive in intelligence gathering and has even installed signal and intelligence equipment in other countries.