Chinese mogul’s bid to buy a bit of Iceland runs aground

A CHINESE tycoon who plans to buy a large tract of Iceland has said he may be forced to abandon his scheme because of the furore it has sparked.

It had been suggested Huang Nubo’s proposal was simply a stalking horse for Chinese expansionism but he now claims reaction in Beijing to the row may lead to him withdrawing from the deal.

Mr Huang, a 55-year-old millionaire and former Chinese official, agreed to pay $9 million (£5.5m) for the 115 square miles of Grimsstadir farm, amounting to 0.3 per cent of Iceland, on which he plans to build a golf course, hotel and outdoor recreation centre.

The project is the first major investment by a Chinese company in the North Atlantic island, but its strategic location has raised security concerns.

“The government may say: ‘Please do not go, do not make trouble,’” Mr Huang said, referring to an application from his company to the Chinese government for official approval.

He added: “Maybe they will think: ‘Do not arouse any unhappiness for Sino-Iceland relations.’ Then I will just give it up.”

Mr Huang said Beijing could take up to six months to decide whether to give its backing to the international deal.

But Mr Huang, chairman of the Beijing Zhongkun Investment Group – which was founded in 1995 and owns property and holiday resorts in several countries – declared: “There’s no excuse for them not to approve it. Tourism is in the domain of our bilateral relationship.”

The deal also needs final approval from Iceland, which may make a decision within ten days, he said. Iceland’s interior minister Ogmundur Jonasson said this week the deal needed to be looked at carefully, citing issues of foreign ownership and access to natural resources.

Among opponents is architect Jon Thorisson, who campaigns against foreign ownership. He said the deal would be the equivalent of America selling the state of Missouri.

“Will large-scale ownership allow them [China] to exert political influence?” he asked. “Is it possible that we Icelanders will end up like tenant farmers on our own land?”

Some analysts said security aspects of the deal could not be ignored. Iceland sits mid-Atlantic between Europe and the US and is close to the Arctic, where several nations are competing to exploit rich natural resources, including oil and gas.

“While this project in Iceland might be a private initiative, it fits in a broader [Chinese] policy agenda to get hold of strategic assets abroad, ranging from land, over raw materials, to know-how,” said Jonathan Holslag, head of research at the Institute of Contemporary China Studies in Brussels.

But Mr Huang said: “Everything China does, no matter whether it’s done by the country or any individual, they would think it is part of a ‘China threat’. This is like how Japan was treated before.”

Listed 161st on the Forbes list of the richest Chinese in 2010, Mr Huang worked for the Chinese Communist Party’s propaganda department and the ministry of construction in the 1980s and early 1990s.

“Later I didn’t want to do it any more because it’s unbearable to be a government official,” he said.

This part of his CV has made some uneasy about his intentions for the land. He has denied links to the Chinese government and said Beijing “has not given me a single cent”.

“They are linking this to strategic concerns,” he said. “I think the westerners have very good imaginations. It’s nonsense.”

Mr Huang, who has been to Iceland twice and spent a total of 12 days there, called the country “the last resort paradise” in the world. He plans to invest $200m over four to five years in the first phase of the development.