Beijing and Oslo also agreed to immediately resume negotiation on a free trade agreement, which did not materialise in 2010 as China put off the decision to conclude it, in a retaliation for granting the peace prize to jailed dissident Liu Xiaobo.
Chinese Premier Li Keqiang and Norwegian Foreign Minister Borge Brende held a meeting here today following which China and Norway reached consensus on normalisation of ties, state- run Xinhua news agency reported.
China hopes to work together with Norway to open a new chapter for bilateral ties, and push forward a sustained, healthy and stable growth of relations, Li said.
"I am very pleased that we are today normalising our political and diplomatic relations with China. This gives us a new opportunity to cooperate. We will resume negotiation on a free trade agreement," Hong Kong-based South China Morning Post reported, quoting Brende as saying in a statement.
According to a joint statement, "the Norwegian government reiterates its commitment to the one-China policy, fully respects China's sovereignty and territorial integrity, attaches high importance to China's core interests and major concerns, will not support actions that undermine them, and will do its best to avoid any future damage to the bilateral relations."
The controversy around the Nobel Peace Prize awarded to the prominent dissident and events connected to the prize had deteriorated China-Norway relations.
China scaled down its ties with Norway after a vain bid to dissuade it from granting the Nobel prize to Liu, who along with his wife is still languishing in the prison serving an 11-year sentence since 2009 for "inciting subversion of state power".
He was the second after the Dalai Lama to get the Nobel Peace Prize.
However, China welcomed Nobel Prize for literature to well-known Chinese writer Mo Yan in 2012.
Besides being a writer, he is also the prominent literary personality of the ruling Communist Party of China (CPC).
China has also imposed restrictions on imports of Norwegian salmon, citing worries that the fish may carry disease.
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