Sigrún Davíðsdóttir's Icelog

Chinese interest in Iceland (updated)

with 24 comments

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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Written by Sigrún Davídsdóttir

August 30th, 2011 at 1:38 pm

Posted in Iceland

24 Responses to 'Chinese interest in Iceland (updated)'

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  1. Focusing attention on the political system of the country the buyer comes from is misplaced, in my view. Rather, the question Icelanders should be asking is: what percentage, if any, of our land are we willing to cede to ownership and/or control by outsiders? (If I were an Icelander, my answer would be: ZERO %.) There was another report (that seems to have gone under the media radar) that an Indian has purchased a large tract of land at Thingvellir with a view to building a luxury hotel. If you focused on the country then nominally India is a democracy, but in practice it is a kakistocracy, and most neo-multimillionaires in India got to be so because of political connections and other hanky-panky.

    If Iceland agrees to the sale of these parcels of land to outsiders, it is going to be a very slippery slope, and this will be the beginning of the end of Iceland as the Iceland we have known. We cannot fault the sellers – after all, they are being tempted with huge amounts of easy cash. The state has to step in and say no, Iceland is not for sale to outsiders.

    By the way, that EEA stipulation seems flaky to me. What if a Chinese married an Icelander in a marriage of convenience? Wouldn’t that ploy circumvent the EEA constraint?

    Rajan P. Parrikar

    30 Aug 11 at 4:26 pm

  2. As for a marriage of convenience, Rajan, that probably isn’t even needed. Magma Energy, a Canadian company (which now has a different name, I believe) bought an energy company in Iceland a couple of years ago, together with the rights to geothermal power for 65 years. To circumvent the EEA restriction they simply established a company in a desk drawer in Sweden. (For all I know, doing this for the sole purpose of circumventing laws might be illegal in Sweden, but that was never pursued by the Icelandic government, even though it claimed to be somewhat unhappy about this.)

    Einar Steingrímsson

    31 Aug 11 at 2:37 pm

  3. The Chinese Communist Party, in which Mr. Nubo has played a prominent role for years, is one of the leading destroyers of the environment. Witness the destruction wrought by Chinese dam projects, the wholesale pollution of the environment by Chinese industry, and the taking of endangered species worldwide for ‘medicinal purposes’ in China — all of which goes on virtually unchecked and unregulated by Beijing today. If Mr. Nubo were an ordinary Chinese, and not someone alligned with an anti-democratic Marxist party, one might view this ‘development’ project differently. However, the fact is Iceland stands for everything the Chinese Communist Party does not (i.e., a green environment, individual rights, etc.), and any country that holds such values would be foolish to begin selling off large portions of its land to individuals and parties wholly antagonistic to those values. Will Gaddafi be permitted to buy a track next?

    John S

    31 Aug 11 at 4:55 pm

  4. I agree with what the previous commenter has stated. If I were Icelandic I too would not want to agree to start selling off parcels of my heritage and homeland to those who wish to make (probably) a lot more money off of it than what was paid and who knows what else.

    Icelanders should strive to protect their uniqueness and not be swayed by such large amounts of cash, no matter who the investor has a ‘friend’ with in the Gov.


    31 Aug 11 at 5:20 pm

  5. A new angle in the recent Icelandic Economic Saga, one wich needs a thorough scrutiny by Icelandic Authorities. To my knowledge of the property in question, Grímstaðir á Fjöllum, there wouldn’t be any obvious viable reason for this transaction. Many scenarios go through one´s mind and give way to much speculation. It will be interesting to follow the outcome of Mr. Nubo´s actity in Iceland.

    S. MacEachern

    1 Sep 11 at 2:14 am

  6. Until he proves that he can actually execute the project (i.e. deposits the funds for the project in a blocked account, discloses his financial due diligence showing how the project will pay for itself, and posts a performance/reclamation bond so the mess can be cleaned up in case China decides he’s its next high-flying scapegoat and makes him disappear), he shouldn’t get a permit for anything, and his cash is good at the bar.

    Knute Rife

    2 Sep 11 at 8:47 pm

  7. Icelandic government and regulators seem to be hopelessly too naive. They have been making stupid blunders again and again and still have not learned their lessons. Because of their stupidity, ordinary Icelandic people are being screwed to the bone by a few business tycoons. A former beer brewer or a business crook was allowed to buy up the the largest bank Lansbanki in Iceland and rolled up foreign debts many times the home country’s GDP. The Icelandic financial regulators were stupid enough to guarantee for these crooks reckless business adventure overseas. What is the result? A tragic disaster! Every Icelander, young and old, man and woman is heavily buried in foreign debt for the next 50 years, a debt an ordinary Icelandic citizen has never borrowed while at the same time his or her savings in the so-called “National” bank have been robbed away.

    Now a foreign business tycoon, regardless of his country origin or motive, is allowed to buy up 0.3% of the Icelandic sovereign land or 300 sq km for only $8.8 million dollars. That is, the whole Icelandic sovereign territory can be bought up for only $2.9b!
    Where to can Icelanders go when the land under your feet does not belong to you anymore? On to the Atlantic ocean perhaps? Even that does not belong to you anymore.

    My point is, Icelandic landowners or farmers, Icelandic politicians, don’t be too naive, don’t be too short-sighted, and don’t be too greedy for short-term gain. Your children will have no place to live because of your greed today.


    3 Sep 11 at 3:56 am

  8. Bjartur, are they naïve or are they wily? Are those in the establishment who are pushing this deal beneficiaries (directly or through third parties) of this transaction? That is the question.

  9. how does the word lease sound?


    4 Sep 11 at 11:09 pm

  10. Rajan, you are right. There must be a lot of wily kickbacks in this kind of business deals. Each time when China buys a Boeing, there are a lot of kickbacks into the pockets of some officials.
    It is incredible for a Chinese government official who left his Propaganda Ministry job and started a company in 1995 to become a filthy rich billionaire while 99% of ordinary Chinese people are struggling from day to day for basic health care, for finding an affordable shelter to live, and saving up for sending their kids to schools. Many Chinese salaried white collar workers in big cities earn just about $455 a month or $5500 a year. This guy must have a lot of backdoor political connections and perhaps a lot of corruptions or bribery to get to this filthy rich level.
    If he wants to build a grand hotel and a golf course in an icy desert, he should just buy a lot for that purpose. He does not have to buy up a land that is three or four times bigger than Hongkong if he does not have other motives. If it is purely for financial gain purposes, it does not make any sense because he will not be able to make any positive return ever from this investment unless he can use this land to expand to Icelandic fishing ground or or other potential resources.


    5 Sep 11 at 2:07 am

  11. Bjartur and Sigrún,
    1. Do Icelanders not recognize a parallel between Chinese Tycoons buying into Iceland and Icelandic tycoons buying into other countries?
    2. Do Icelanders find it preferable to have Icelandic assets in Iceland owned by Chinese tycoons, and ostensibly Canadian consortiums (owned by American and other tycoons), instead of by Icelandic ones?
    3. Why do they? Do Icelanders feel culturally that all Icelanders are peasants together, so they resent, or become jealous of, “fellow-peasants” achieving success above a certain “peasant level” of financial achievement, which is seen something foreigners, not Icelanders, achieve, and so alright for them?

    I ask because I see what appears a strange phenomenon in which Icelanders who appear to love to hate fellow Icelanders for attaining success, to such extent that they approve the British and Dutch having separated those achievers from their achievements (which continue to achieve for new foreign owners, which appears to be acceptable to Icelanders), seem to have no problem with foreigners being so successful and buying and owning as they hate the idea of Icelanders being able to do.

    Another question I have in regard to the asserted property development is, how much play-time a golf course in Iceland might have, and if there is enough tourist attractiveness in modern Iceland (once again a “backwater” community since the financial focus came to be turned off in 2008)?

    And for a last question, Are Icelanders unaware that the Icelandic featuren that is attracting foreign attention today is Iceland’s overbalance of carbon-credit potential? Iceland has a veritable wealth of offset value for heavily polluting industrialists in heavily polluting nations, such as China today, and Canada when its tar-sands oil extraction activities are up and running. China needs to offset its “black rivers” and Canada the environment it will destroy.

    To those of us who follow these things Iceland is looking much like a naive and probably retarded cutie-pie being swept down on by sly-fox wolves, and thinking the interest they are showing must be sincere, that they must love her and can’t possibly be conniving or mean her any harm… After all, they are rich and exotic and foreign, not people they know…


    7 Sep 11 at 2:20 am

  12. well. how is the progress with capitalism and corruption in iceland?

    here is a bit from will hutton in guardian january 2008…on what’s up in china

    Ever since the late 1990s the party leadership, then under Hu’s predecessor Jiang Zemin, has rightly become more and more preoccupied with how corruption is corroding the party. “If we do not crack down on corruption, the flesh-and-blood ties between the party and the people will suffer a lot and the party will be in danger of losing its ruling position, or possibly heading for self-destruction,” Jiang declared in 2002, in his last political report to the National Congress. High-level officials had been arrested and imprisoned for embezzlement and racketeering; they included the party secretary and mayor of Beijing, Chen Xitong, a member of the Politburo. Cheng Kejie, vice-chairman of the National People’s Congress, was executed for taking pounds 2.5m in kickbacks for arranging land deals and contracts for private business. In the financial system the highest-profile casualties were three of prime minister Zhu Rongji’s hand-picked “can-do commanders”, selected to sort out the financial crisis of the late 1990s, and one of whom, Li Fuxiang, leaped to his death from the seventh floor of Beijing’s Hospital 304 while under investigation. To put this in a British context, it is as if the Mayor of London, the speaker of the House of Commons, the chief executive of HSBC, along with a deputy governor of the Bank of England and the deputy chief executive of the Financial Services Authority had all been imprisoned for fraud with one committing suicide.


    7 Sep 11 at 4:28 am

  13. also this is pretty instructive

    After the founding of the People’s Republic of China, Comrade Mao Zedong continued to lead us forward by applying the principle of seeking truth from facts. Of course, at that time many questions could not be raised because the necessary conditions were absent. If we are to hold high the banner of Mao Zedong Thought, we must always proceed from current reality when handling questions of principle and policy. Today, as we work to achieve China’s four modernizations, many conditions are present which were absent in Comrade Mao’s time. Unless the Central Committee of the Party is prepared to rethink issues and is determined to act in the light of present conditions, many questions will never be posed or resolved. For example, while Comrade Mao was still living we thought about expanding economic and technical exchanges with other countries. We wanted to develop economic and trade relations with certain capitalist countries and even to absorb foreign capital and undertake joint ventures. But the necessary conditions were not present, because at the time an embargo was being imposed on China. And later, the Gang of Four branded any attempt at economic relations with other countries as “worshipping things foreign and fawning on foreigners” or as “national betrayal”, and so sealed China off from the outside world. Comrade Mao Zedong’s strategic idea of differentiating the three worlds opened up a road for us. We have gone on opposing imperialism, hegemonism, colonialism and racism, working to safeguard world peace, and actively developing relations, including economic and cultural exchanges, with other countries on the basis of the Five Principles of Peaceful Coexistence. After several years of effort, we have secured international conditions that are far better than before; they enable us to make use of capital from foreign countries and of their advanced technology and experience in business management. These conditions did not exist during Comrade Mao Zedong’s lifetime. Yes, foreigners may still deceive us or take advantage of our backwardness. For instance, when we import complete plants, they may edge up the price or pass off inferior goods as high-grade ones. But generally speaking, we now have favourable conditions which weren’t there before. If we were never supposed to do anything that Comrade Mao hadn’t suggested, we could never have decided on our present course of action. What does holding high the banner of Mao Zedong Thought mean here? It means proceeding from present realities and making full use of all favourable conditions to attain the objective of the four modernizations as defined by Comrade Mao Zedong and proclaimed by Comrade Zhou Enlai. If we could only act as Comrade Mao suggested, what could we do now? We have to develop Marxism and also Mao Zedong Thought. Otherwise, they will become ossified.

    When we say that theory must be tested in practice, this is what we are talking about. That the issue is still being argued shows how rigid some people’s thinking has become. The basic problem is still the one I’ve mentioned — that these people’s thinking violates Comrade Mao Zedong’s principle of seeking truth from facts and the principles of dialectical and historical materialism. We have here, in fact, a reflection of idealism and metaphysics. The world is changing every day, new things are constantly emerging and new problems continually arising. We can’t afford to lock our doors, refuse to use our brains and remain forever backward. In today’s world, our country is counted as poor. Even within the third world, China still rates as relatively underdeveloped. We are a socialist country. The basic expression of the superiority of our socialist system is that it allows the productive forces of our society to grow at a rapid rate unknown in old China, and that it permits us gradually to satisfy our people’s constantly growing material and cultural needs. After all, from the historical materialist point of view correct political leadership should result in the growth of the productive forces and the improvement of the material and cultural life of the people. If the rate of growth of the productive forces in a socialist country lags behind that in capitalist countries over an extended historical period, how can we talk about the superiority of the socialist system? We should ponder the question: What have we really done for the people? We must make use of the favourable conditions we now enjoy to accelerate the growth of our productive forces, improve the people’s material and cultural life and broaden their outlook.

    September 16, 1978

    commrade deng xiaoping


    7 Sep 11 at 6:41 am

  14. Since its entry into the World Trade Organization in 2001, China has imported goods worth nearly $750 billion every year, and created over 14 million jobs for those exporting countries and regions. Over the past decade, foreign-funded companies in China have remitted a total of $261.7 billion of profits, with an average annual increase of 30 percent. By the end of 2009, China’s development aid had reached 256.3 billion yuan ($40 billion) and benefited 161 countries and over 30 international and regional organizations.


    7 Sep 11 at 6:58 am

  15. I’ve been following this with interest. I just noticed the comment “Iceland is looking much like a naive and probably retarded cutie-pie being swept down on by sly-fox wolves”.

    I find the behaviour of Icelandic politicians somewhat bizarre at times like this. They seem to just follow their own weird rules. Why was the Icelandic Ambassador to China by Huang Nobu’s side when he announced the deal? Why is the president just accepting completely the notion that this deal is purely about Asian tourists coming to Iceland to experience solitude (?), as if there could be no other possible motivation for buying 300 square kilometers of land, upon which they want to build an airport, amongst other things? It almost seems like there is something deliberate about their naivety.

    One thing is for certain – if Iceland looks like a naive and easy target to a foreign investor, the reality once you get there is anything but, as Ross Beaty discovered last year. I suspect that Mr Nobu will ultimately meet the same fate, once the practicalities of his hotel idea have been put to the test.


    7 Sep 11 at 9:54 pm

  16. m,
    Lovely prop for China. Your quotes make it sound that the aristocracy in China, acting as China are doing wonderful things for ‘the people’ of China, providing ‘them’, the commons, opportunities and material and cultural improvement.

    I emphasise ‘the people’ and ‘them’, because those words suggest it is not those who are doing anything, or, at least, they are not doing for themselves, but for those looking after them, but ‘them’ that all is being done for.

    I am not sure a superior layer of privileged population providing well for an under-layer, taking good care of them, deciding, for them, what they need, want and will be happy with, is real socialism. It sounds a bit nearer medieval, the lords and their vassals looking humanely after their serfs and peasants; perhaps Confucian, the Imperial philosophes fulfilling the Master’s instructions to ‘guide’ the unlearned, their “children”; or boyar apparatchiki maintaining estates, or a state, for their proletarian tovarichi. All feudal models.

    Apart from all that, however, while I have your attention, how many luxury B&B hotels and golf courses have Chinese tycoons, in or out of government, built in Tibbet? Tibbet does have barren land and unpopulated areas, as Iceland does, where Chinese could tour to get away to enjoy (perhaps learn and learn to enjoy) to golf. Mongolia has, too, and perhaps more Icelandic, with not so much altitude and up and down. Anyone doing such development in those areas?

    And last, you write Comrade Deng writing, “when we import complete plants, they may edge up the price or pass off inferior goods as high-grade ones.” and the statistic, “China has imported goods worth nearly $750 billion every year, and created over 14 million jobs for those exporting countries and regions.”

    Does the count of jobs created include the jobs of building the “complete plants” some years ago, along with the temporary jobs of dismantling and shipping the plants? And were the jobs lost where the plants were, for the plants having been exported, so they could be imported to China, subtracted from the jobs “created” figure?


    9 Sep 11 at 2:05 am

  17. These guy have received very little sunshine in the Icelandic media. They say they have “major plans for Iceland.” I guess this must be news to the Icelanders –

    Their point man in Iceland is one Bala Kamallakharan, who, according to his bio in the link below has enrolled for a PhD in Economics at the University of Iceland. The bio also talks about his activities in Glitnir –

    Count me unimpressed by these chaps.

    Rajan P. Parrikar

    10 Sep 11 at 8:18 am

  18. […] to buy the big plot of land, Grimstadir a Fjollum, that he had his eyes on. As reported on Icelog earlier, the sale was a hot topic in […]

  19. […] Icelogs on the Nubo sale are here and […]

  20. […] Party, set to win the most votes, had expressed doubts about Huang’s venture. More supportive was Sigmundur Davíð Gunnlaugsson, from the Progressive Party, the runner-up and a possible junior […]

  21. […] Partii Niepodległości, wyraził wątpliwości co do przedsięwzięcia Huanga. Lepiej nastawiony był Sigmundur Davíð Gunnlaugsson z Partii Postępu, prawdopodobny zdobywca drugiego miejsca i […]

  22. […] up a lot of controversy. Gunnlaugsson was rather supportive towards Huang’s plans, while Benediktsson was more opposed. In 2011, he said that foreign purchases of land would need to be […]

  23. […] up a lot of controversy. Gunnlaugsson was rather supportive towards Huang’s plans, while Benediktsson was more opposed. In 2011, he said that foreign purchases of land would need to be […]

  24. OK, your dog had soooo much to say. In this reading he and I are haivng a conversation. Blessings,AlixCharlie Brown where are you?I’m in heavenWhy are you there?It was my time to goHow did you get there?I arranged to goYour human mom Elana is very sadYes I know but she does not know. This is the crux of the message this is what we came to you (Alix) so that she could hear: there is nothing sad about passing over, there is nothing sad. The part of us that is spirit is always joyful and always alive and it never knows death. Only the personality knows death and that is supposed to die sooner or later anyway.When Elana is in the kitchen making breakfast I am there. When her daughter sees me I am there. I will always be there with her but not in the body any more just in spirit. I am to be her guide.Elana’s daughter is very magical. She sees things and knows things. It is very important that Elana honors this seeing. I will come to the daughter at important times she should learn to pay attention when she sees me.The world is a magical place. I am gone but not really. Please tell Elana to stop crying and begin to embrace that magic. Her life depends on it. This is what she is here to do and I will always be there beside her. I love her slurp all is well I am with god good-bye and trust!


    7 Dec 15 at 8:56 pm

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