The Embassy of Republic of Iceland was set up in Beijing in 1995, the most significant move in the region after the establishment of bilateral relations with China on 8 December 1971 .

The Icelandic Embassy in Beijing is the first Icelandic Embassy in Asia and Oceanic region and is responsible for Icelandic affairs with China, DPRK, South Korea, Mongolia, Vietnam, Laos, Thailand and Cambodia. 

Bilateral relations have contined to be strengthened ever since the establishement of diplomatic ties, with frequent exchanges of many important high-level visits from different ministries, highlighted by the state visit of President Jiang Zemin to Iceland in 2002 and the state visit and working visit of President Olafur Ragnar Grimsson to China respectively in 2005, 2007 and 2010.  The official visit of Premier Wen Jiabao in April 2012 and the official visit of Prime Minister Johanna Sigurdardottir in 2013 further enhanced bilateral cooperation between Iceland and China in the new decade.

Bilateral relations entered a new phase in 2013 after the signing of Free Trade Agreement between Iceland and China.  Iceland is looking forward to closer and broader cooperation with China in the future.