In 2013, the friendly relations and cooperation between the People's Republic of China and the Republic of Iceland enjoyed comprehensive growth.

The two countries had close high-level exchanges. In March, Icelandic President Olafur Grimsson sent a congratulatory message to Xi Jinping upon his election as Chinese President. Prime Minister Johanna Sigurdardottir sent a congratulatory message to Li Keqiang upon his appointment as Premier of the State Council. Foreign Minister Ossur Skarphedinsson sent a congratulatory message to Wang Yi upon becoming the Chinese Minister of Foreign Affairs. From 13 to 18 April, Prime Minister Sigurdardottir paid an official visit to China. She met with President Xi and held talks with Premier Li. The two sides issued the Joint Statement Between the Government of the People's Republic of China and the Government of Iceland on Comprehensively Deepening Bilateral Cooperation. The two countries also formally signed the Free Trade Agreement Between the Government of the People's Republic of China and the Government of Iceland, the first bilateral free trade agreement between China and a European country. Despite the overall decline in Iceland's external trade, China-Iceland trade expanded. Bilateral business ties reached new heights.

In October, member of the Political Bureau of the CPC Central Committee and Vice Premier Ma Kai paid an official visit to Iceland. He met with President Grimsson and held talks with Prime Minister Signumdur Gunnlaugsson. In October, new Icelandic Ambassador to China Stefan Skjaldarson presented his credentials to President Xi Jinping.

Practical cooperation in various fields expanded. In July, the two countries signed the Agreement Between the Ministry of Science and Technology of the People's Republic of China and the Ministry of Education, Science and Culture of Iceland on Cooperation in the Fields of Science and Technology. In September, the central banks of China and Iceland extended the three-year bilateral currency swap deal. The two sides further deepened cooperation on thermal energy. In December, the government of Xianyang, Shaanxi Province, and Sinopec Star Petroleum signed an agreement on thermal resources development with Icelandic Orka Energy Co., Ltd.

People-to-people exchanges became more active. In February, the Concert for the 60th Anniversary of the Iceland-China Culture Society was held in Reykjavik. Also in February, the first Iceland-China Friendly Chess Match was held in Iceland. President Grimsson held a reception at his residence to welcome the Chinese delegation. In May, a Chinese delegation on high-level education visited Iceland. In July, China Foreign Languages Publishing Administration held activities including "Chinese Culture in Northern Europe", "China Day", donation of a bust of Confucius and photo exhibitions of "The Hometown of Confucius" and "Fabulous Suzhou" in Iceland.

By the end of 2013, there were three pairs of sister cities between China and Iceland.