China to back Swedish small, medium firms with loans STOCKHOLM (Reuters) - China's government has signed a deal with Sweden for loans to small and medium-sized firms, which media reports said could be worth 1 billion euros ($1.25 billion), a sign of further Chinese interest in the Nordic state after buying car maker Volvo. Sweden's Industry Ministry said in a statement an investment agreement was signed during a visit by Industry Minister Annie Loof to Beijing. It named no figures but Swedish television said on its website that Chinese Prime Minister Wen Jiabao had stunned his hosts, during an April visit, by saying China wanted to invest about 1 billion euros in Sweden, about 9 billion Swedish crowns and this would be part of the new agreement. No one at Sweden's Industry Ministry was available to comment on the sum mentioned in the reports. In a statement, the ministry said the agreement aimed at deepening cooperation between small and medium-sized Swedish and Chinese companies. "I am very pleased with our agreement which strengthens the possibilities for Swedish companies operating in China and Chinese companies in Sweden," Loof said in the statement. She told Swedish television in Beijing after her talks that the agreement meant companies would be able to apply for innovation loans from the China Development Bank. Chinese business has shown increased interest in the Nordic region, including the purchase in 2010 by Zhejiang Geely Holding Group, parent of Hong Kong-listed Geely Automobile Holdings Ltd., (0175.HK) of upmarket car maker Volvo from Ford Motor Company. A Chinese tycoon is also in the process of leasing a chunk of land in Iceland for a holiday resort. Reporting by Patrick Lannin; Editing by Anthony Barker