The FT dedicates a front-page article today to a Chinese property billionaire, Huang Nubo, who wants to buy the largest single farmland in Iceland, Grimstadir, for a major development of all-year tourist facilities and a hotel. He is also planning to build a bigger hotel in Reykjavik, though he hasn’t yet secured property or land there. The two hotels will be linked by his own air company, another angle to this grande scheme. Nubo has offered 1bnISK (€6m) for the land, saying he plans to invest further 20-30bnISK (€120-180m) in the project.
Nubo’s Icelandic connections go back to his student years, when he had an Icelandic friend. He has lately cultivated his Icelandic connections and taken some Icelandic friends to the North Pole. One of his Icelandic friends is married to the former leader of the Social democrats, former minister of foreign affairs Ingibjorg Solrun Gisladottir. This friend of Nubo is also closely related to the present minister of foreign affairs Ossur Skarphedinsson.
Huang Nubo worked for the Chinese communist party, was an official until he emerged as the owner of Chinese properties in 2003. His company, Zhongkun Group, owns properties in China, resorts and tourist facilities. His company website indicates that most of this is still no further developed than to the computer picture stage.
Lately, his interests have been turned to the US but a planned project in Tennessee hasn’t materialised. Now he seems to have his attention turned to Northen Europe, Iceland first and foremost, inspired by his love of and interest in nature and poetry. One article states he has invested 1m yuan (€108,000) another mentions $1m in ‘China-Iceland Culture Fund,’ a noticeable sum in Icelandic culture life that has so far, as so many of Nubo’s other projects, has failed to reach the tangible state.*
He is also said to be one of the largest shareholders in Royal Business Bank, an American-Chinese bank, investing $1m. Unfortunately, the bank’s website gives no indication of who the shareholders are but this allegedly largest shareholder doesn’t sit on the board of the bank. The bank was set up in 2008 with a capital of $71m.
The leader of the Progressive party, Sigmundur David Gunnlaugsson whose constituency would benefit from the Chinese enterprise, has welcomed the investment, saying it really doesn’t matter if the investor is French, German or Chinese. Svandis Svavarsdottir environment minister says that big plans need to be carefully scrutinised. Prime minister Johanna Sigurdardottir says that investors like Huang Nubo is just what Iceland sorely needs. With strong regulations, that Iceland has, according to Sigurdardottir, there is nothing to afraid of.
This Chinese interest in Iceland is one of several Chinese projects under discussion in Iceland. China plans to build a huge embassy, indicating that its interest must be for something more than just normal diplomatic relationship. A Chinese research institution is exploring the viability of building an unmanned research station, in addition to its station in the Antarctica, to investigate the Northern lights. In addition, there is great interest in China for the sea route through the ice cap around the North pole.
Only foreigners from the EEA can buy land in Iceland, which means that this matter has to go through official channels in Iceland.
Icelandic politicians must now decide whether and to what extent Iceland should welcome Chinese investors. Investors from a country where no one is rich unless deemed worthy by the Chinese Communist Party and its officials. A country that is avidly seeking investments abroad though at the same time foreign investment in China is a tortuous process. That’s the fundamental difference between investors from, say EU countries, and from China. A difference much noted in Africa where Chinese investors have invested vast sums in land, mining and infrastructure.
In case, Icelandic politicians haven’t noticed, the questions asked everywhere in democratic countries is if politicians and business leaders are content with dancing to the Chinese flute or if they think pressure should be exerted on the Chinese to open China to foreign investments, ia. by improving fundamental rights such as human rights and rights of private property.
*This is wrong. The money has materialised, is held by a fund in China, which sponsored a poetry festival in Iceland last year. The next festival, now in autumn, will take place in China.
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