INSIDE                                                           

Population: 320,000

Area: 103,000 km2

Capital: Reykjavik Official Language: Icelandic

Climate: Temperate climate warmed by the Gulf Stream

Ethnic Groups: 93% Icelandic, 2% Nordic and 5% others Icelandic president: Olafur Ragnar Grimsson

Prime Minister: Johanna Sigurdardottir

Independence Day: December 1, 1918

National Day: June 17, 1944

Iceland is a Nordic European island country that is volcanically and geologically active.

As one of the most developed nations in the world, Iceland has a market economy and maintains a welfare system providing universal healthcare and tertiary education for its citizens.

In 2011, it was ranked the 14th most developed country in the world by the United Nations' Human Development Index, and the fourth most productive country per capita.

But Iceland has witnessed a serious financial crisis since 2008. Its three major commercial banks collapsed due to difficulties in refinancing their short-term debt.

Icelandic culture is founded upon the nation's Norse heritage. Its cultural heritage includes traditional Icelandic cuisine, poetry and medieval sagas.

Currently, Iceland has the smallest population among NATO members and is the only one with no standing army.

2011 marked the 40th anniversary of establishment of diplomatic relations between China and Iceland.

Iceland was the first European country to recognize China's full market economy status and also the first to hold talks with Beijing on a free trade agreement.

In 2010, Iceland-China bilateral trade in goods fell to $240 million.

China has become Iceland's third-largest source of trade deficit. By December 2010, China ranked 18th in Iceland's export markets and 7th as a source of imports.