Norway should brace for a harsh reaction from China, experts warn.

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OSLO (AFP) - Norway should brace for a harsh reaction from China following the Norwegian Nobel Committee's decision to hand the 2010 Peace Prize to jailed Chinese dissident Liu Xiaobo, experts said Friday.

The Norwegian government said China had summoned its ambassador on Friday to protest at the decision.

"China's strategy will probably be to punish Norway, to make an example of it," said Kristian Berg Harpviken, head of the Oslo-based Peace Research Institute.

"Norway is a country of relatively little importance to China, but Beijing could make a resounding point by punishing it," he told AFP.

But Harpviken said he thought China would largely confine its wrath to Norway, instead of taking on others in the international community who have also supported Liu's award.

Raising the stakes is the fact that Norway and China are negotiating a free trade agreement which the Norwegian government hopes to sign by the end of the year.

It would be the first such agreement between a European country and the Asian superpower.

"Norway would be the first country in a long list of hopefuls to make such a deal, and this is thanks to a decade of very warm bilateral relations," said Jan Egeland, the director of the Norwegian Institute of International Affairs.

"But now, opinions in Beijing are most likely divided," he acknowledged.

Norwegian Foreign Minister Jonas Gahr Stoere meanwhile tried to downplay the impact the award could have on the trade deal talks.

"We've made great progress in the negotiations. If the accord is in the best interest of the two countries, we should concentrate on the goal of completing negotiations," he told AFP.

"I'd find it surprising if other factors would be a hindrance," he added.

Harpviken however said he would be astonished if the recognition of a Chinese rights activist -- something Beijing has repeatedly warned against -- did not impact the negotiations.

"I wouldn't be surprised if the negotiations were significantly delayed or if they even collapse all together," he said.

Chinese foreign ministry spokesman Ma Zhaoxu said in a statement Friday that Liu's Peace Prize would "damage Sino-Norwegian relations," but did not go into more detail.

"I would like to emphasise the difference between the independent Nobel Committee and the official Norwegian authorities," Stoere said.

Although appointed by parliament, the Norwegian Nobel Committee is an independent body.

The last time Norway and China faced off over the Nobel Peace Prize was in 1989, when the committee awarded the honour to the Tibetan spiritual leader, the 14th Dalai Lama, for his work for the liberation of Tibet.

"The Norwegian government did fear that it would freeze diplomatic relations. They worked hard to make sure this didn't happen, and they succeeded," said Harpviken.

But back then, Harpviken pointed out, there was less danger of a diplomatic row because Norwegian-Chinese relations were far less developed.