REYKJAVIK - Prime Minister of Iceland Johanna Sigurdardottir on Thursday expressed her optimism about signing a historic free trade agreement between Iceland and China which aims to promote better bilateral trade relations.

"I am very optimistic and expect that the Free Trade Agreement can be signed during my official visit," Sigurdardottir said in an exclusive written interview with Xinhua, adding that most of the major issues, "both technical and horizontal," had been solved by the sixth round of bilateral talks in Beijing this January.

Sigurdardottir, whose country is the first European state to recognize China's full market economy status, called such pact a "landmark agreement" with "one of the largest economies in the world."

She said potential benefits of the agreement were mutual: a sound Chinese economy could provide multiple opportunities for Iceland's exporters and service providers, whereas prices of Chinese products to Icelandic consumers could also be lowered. "Meanwhile, China would benefit from such "added value" from Iceland including the geothermal utilization and research know-how, and energy efficiency in transport.

In addition to finalizing a FTA, a large business conference between delegations from both China and Iceland is also on the schedule of Sigurdardottir's visit, where "representatives of many of the largest Icelandic companies" are expected to meet with their Chinese business counterparts.

"I know that many of our companies are aiming to sign business agreements during the visit and certainly many more will follow with this new framework for cooperation and trade." the prime minister said.

Sigurdardottir will start her six-day official visit to China on April 13.

Since the establishment of diplomatic relationship in 1971, China-Iceland bilateral trade and economic cooperation progressed smoothly.

In 2012, bilateral trade value reached $180 million, up 21.1 percent year-on-year. Among all, China's exports to Iceland amounted to $953.9 million, up 24.6 percent, and its import from Iceland stood at $889.6 million, up 17.7 percent.