Iceland will launch free trade negotiations with China early next year, said visiting Icelandic Foreign Minister Valgerdur Sverrisdottir on Monday.

Sverrisdottir made the remarks at a reception marking the 35th anniversary of the establishment of diplomatic ties between China and Iceland.

She said the two sides had decided to follow up the feasibility study completed over the summer by launching free trade negotiations early next year.

"This will provide a stronger base for the future development of our relations," she said.

Iceland is the first developed country in Europe to recognize China's market-economy status and is also the first European country to start FTA feasibility discussions with China.

China has so far established nine FTAs with 27 countries and regions and signed 334 regional trade cooperation deals. China is also currently in FTA talks with New Zealand, Australia and the Gulf Cooperation Council.