Chinese tycoon to buy piece of Iceland for €70m

 

ONE OF China’s best-known property developers Huang Nubo, a poet and mountaineer with extensive Communist Party links, is planning to spend €70 million to buy a 300sq km chunk of Iceland to build a luxury eco-tourism project.

But the size and location of the site has sparked fears that perhaps the project could be merely a first step in a geopolitical powerplay that might threaten Iceland’s sovereignty. The piece of land in question is nearly one quarter the size of Hong Kong.

Mr Huang, listed by Forbesmagazine as China’s 161st richest person with a net worth of €617 million, has struck a deal with private landowners in Iceland for the tract of land in the Grímsstadir á Fjöllum region, and the luxury development would include an eco-tourism golf resort project, the Financial Timesreported.

“We face the fact that a foreign tycoon wants to buy 300 square kilometres of Icelandic land. We have to discuss it and not swallow without chewing; would we find it all right if the entire country were sold this way?” Iceland interior minister Ögmundur Jónasson told the Iceland Review.

“People are often too quick to accept offers like these,” he said. The deal requires the approval of both China and Iceland.

No one has anything to fear, insists Mr Huang.

“The project is a purely commercial move and has no connection with politics. The concerns are groundless,” he was quoted saying by China’s official new agency, Xinhua.

A deeply mercantilist nation, China is always looking for ways to expand trade links around the world. Iceland occupies a strategically important location between Europe and North America and could function as a potential hub for Asian cargo should climate change open Arctic waters to shipping.

An entrepreneur, Mr Huang (55) tends to describe himself as a poet, who writes under the pseudonym Luoying, and he is also famous for his mountaineering exploits in China.

He is a high-profile capitalist, and he has a reputation as a philanthropist, but his Communist Party credentials are solid.

Mr Huang is a former propaganda department section chief and has also worked as an administrator at a section of the ministry of construction, one of the agencies responsible for preserving historic sites.

His company, which he established in 1995, manages many of China’s most famous tourist sites, such as Hongchun in Anhui Province and Zhongdian near Tibet in the southwestern province of Yunnan. Zhongkun is also developing projects in Nashville, Tennessee, and in Los Angeles, and also has interests in Japan.

His ambitions in Iceland are well documented. Last year he said he was planning to organise a poetry forum in Reykjavik, and he donated €700,000 to the “China-Iceland Culture Fund”.

Energy is central to the links between China and Iceland at the moment.

China is the world’s leading investor in alternative energy technologies, and has formed a partnership with Iceland to develop geothermal technologies.

China’s second biggest oil and gas company, China Petroleum Chemical Corp, has committed to making geothermal one of its main businesses, and has signed a deal with Iceland’s Geysir Green Energy to jointly develop the renewable energy source.

China has been working hard to forge solid financial links with Iceland, which has been struggling since its economy collapsed in 2008 after a banking crisis, which saw three of its major banks collapse within weeks. Iceland is currently struggling under the weight of a bailout by the International Monetary Fund.

Iceland has been desperate to improve its access to foreign currency since then and in June last year, Iceland’s central bank, Sedlabanki, signed a currency swap agreement with China worth 66 billion krona (€400 million).

Political links appear to be very strong, particularly as Iceland appears to feel that China was speedy in stepping in to help when the economy collapsed.

Relations were less than friendly in 2008, when Icelandic singer Bjork shouted “Tibet! Tibet!” at the end of her song Declare Independence! during a concert in Shanghai. If the bid for the Icelandic territory is successful, the Chinese will own 0.3 per cent of the total land area of the singer’s homeland.