Huang Nubo, a Chinese businessman and former government official ranked by Forbes’ as China’s 161st richest person in 2010, intends to buy the Grimsstadir farm in northeastern Iceland for $8.8 million dollars. The farm stretches across 300 square kilometers of scenic land near Dettifoss, Europe’s most powerful waterfall, and Myvatn, a volcanic lake. Since the purchase is for such a large amount of land, approximately 0.3% of Iceland, the deal will have to be approved by the Icelandic government. The amount of land is equivalent to the U.S. selling Missouri to a foreign investor. The Minister of the Interior, Ogmundur Jonasson, stated:
“What is special about this is the scale. We are talking about 300 square kilometers (120 square miles). This is not a little plot of land. This is considerable land mass, and it’s absolutely natural that we should want to look carefully into the matter, and this we would do regardless of the applicant’s nationality.”
In a video interview available here, Nubo asserts that he intends to build a horse farm, golf course, and racing course, in addition to upgrading the existing hotel and villa facilities. He plans to invest $200 million in developing the farm into a full-blown ecotourism resort – not a small sum of money, even for a billionaire like him. The resort could eventually form part of a chain of similar destination hotels stretching across Scandinavia.
Nubo’s intended purchase has stoked fears of China’s incursions into the Arctic. On the one hand, Nubo is a former government official, and the purchase of land is not small. On the other hand, one of the main reasons that China is interested in Iceland is because of its strategic position along the shipping lanes. But the land Nubo is buying is a full 50 kilometers from the nearest deepwater port, and the roads there are not all sealed.
China has invested lots of time and money in building its ties with Iceland. Of all the Arctic states, Iceland and Norway are probably its closest partners. For instance, Iceland built the biggest embassy in Reykjavik in order to cement its ties with this tiny Arctic nation. Its investment has come at a much needed time, too. Olafur Ragnar Grimsson, Iceland’s president, remarked,
“China and India lent Iceland a helping hand in many constructive ways whereas Europe was hostile and the US was absent.”
Sino-Icelandic relations are at a high point. Grimsson has visited China five times in the past six years and, during his fifteen-year presidency, claims to have welcomes more delegations from China than “the US, UK, Germany, France, Italy and Spain combined.” If anyone fears the Chinese deal in Iceland, it seems like it might be other Arctic nations rather than Icelanders themselves – or at the very least, their president.
As the last of the $2.25 billion in funds approved by the IMF to bail out Iceland is released, Iceland has its gaze pointed not west to the U.S. nor east to Europe. The U.S., Iceland’s former guarantor of its security, pulled out of Naval Air Station Keflavik in 2005 and hasn’t spent much time building the relationship since. Relations with Europe soured after the Icelandic economy tanked. Instead, it is looking halfway around the world to China.
News Links
“Chinese billionaire to purchase big chunk of Iceland,” CTV
“China tycoon to buy part of Iceland,” FT
“Iceland’s president welcomes Chinese tycoon after abandonment by west,” The Financial Express
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Chinese businessman seeks to buy and develop land in Iceland