China's ambitions to expand its dominance has gained foothold in the European region as it signed on Monday a free trade agreement with Iceland enabling access to the latter's abundant resources such as rare earths, iron ore and oil.

As the icecaps slowly melt in the Arctic region, China ensured it wouldn't be left behind to seize the potential economic opportunities it can derive from it, never mind if it can possibly further exacerbate the global warming phenomenon.

"China sees itself as a 21st century power and it wants a seat at the table," Malte Humpert, founder of the Arctic Institute, a think tank in Washington, was quoted by the Christian Science Monitor. "They are seeing where there is potential ... and developing their geo-strategic position."

Resources such as rare earths, iron ore, oil, and gas, commodities China badly need, become more accessible as global warming shrinks the polar ice. According to estimates of the US Geological Survey, the Arctic region holds about 13 per cent of the world's untapped oil. And then there are the rare earths, believed to be most abundant in Greenland.

Iceland's Foreign Minister Ossur Skarphedinsson and China's Commerce Minister Gao Hucheng signed the agreement in Beijing on Sunday during a state visit by Prime Minister Johanna Siguroardottir of Iceland, closing six years of talks.

The potential of an ice-free northern sea route during the summer months has likewise extended China's target to save on shipping costs to Europe by as much as 30 per cent.

"Europe is now China's biggest trade partner and we believe the Arctic route could play a very important role in China's trade, taking a significant proportion of it," Zhang Yao, director of the Ocean and Polar Research Center at the Shanghai Institutes for International Studies, said.