From Iceland — Red Flag Over Grímsstaðir?

Red Flag Over Grímsstaðir?

Published September 12, 2011

Red Flag Over Grímsstaðir?

The big Iceland media stir this last month was Chinese tycoon Huang Nubo’s attempted purchase of 300 square kilometres of pristine Icelandic countryside in Grímsstaðir á Fjöllum, in the northeast of the country. Huang styles himself as a poet and adventurer, and although he worked for the Chinese government for a greater part of his career—as section chief for the Communist Party’s propaganda department and administrator within the Construction Ministry—he maintains his intentions are motivated purely out of love of nature and his on-going investments in eco-tourism.
Numerous sources point out that Huang is clearly a party-insider. “His company, Zhongkun…” notes the Independent, “manages many of China’s most famous tourist landmarks, such as Hongchun in Anhui Province and Zhongdian in Tibet.” (One of his former government employers, the Construction ministry, is responsible for preserving historical sites, and it is implied that obtaining a contract to run state-owned tourist facilities can only occur with the ‘right’ connections—what Chinese businessmen call guan xi). Outside of China and Iceland, Huang also has projects in the works in Nashville and Los Angeles as well as in Japan.
An evil scheme?
In fact, the Independent intimates that this may not just be one man’s ambition, stating, “Beijing 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 potentially function as a hub for Asian cargo should climate change open Arctic waters to shipping.”
Quoted in Deutsche Welle, Jonathan Holsag, head of research at the Institute of Contemporary China Studies, said, “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.”
President Ólafur Ragnar Grímsson welcomed Huang’s investment in Iceland, telling the Financial Times that at the height of Iceland’s economic woes, Europe and the US abandoned his little Atlantic nation, but, “China and India lent Iceland a hand in many constructive ways…” He explained to the FT that he personally wrote to China’s President Hu Jintao asking for help. “This,” he says, “was a catalyst for last year’s [$500m] currency swap agreement between the two countries.”
Cold War mindset?
Huang, listed by Forbes as China’s 161st richest person, says he wishes to create a deluxe resort attracting over 10.000 tourists to his Icelandic wilderness, and plans to invest over 140 million Euros in Grímsstaðir over the next four to five years.
China’s Xinhua News Agency criticised the international media for stirring things up. Fu Shuangqi ran with the headline “Cold War mindset behind conspiracy theory on China’s overseas investment,” and suggested that Huang’s investment is entirely private and has nothing whatsoever to do with the Chinese government.
The FT asked the question why anyone—let alone a Chinese tycoon—would be interested in procuring a “desolate area of north-east Iceland…less still to invest another $100m in building a luxury hotel and golf course,” and noted that in a recent report for the European Council on Foreign Relations, François Godement and Jonas Parello-Plesner indicated serious concerns regarding China’s overseas investment policies. “Crisis-hit Europe’s need for short-term cash is allowing Chinese companies not just to strike cut-price deals but also to play off member states against each other—replicating a strategy China has already used in the developing world.”
Recent history
Talking to the AFP, Huang explained that outside of the luxury hotel and golfing complex, he planned to use ‘his land’ “to unite two [nature] reserves…[creating] Europe’s biggest nature reserve.” Huang has stated on numerous occasions that he will ensure that his little slice of Icelandic nature will be treated with utmost of respect and care both environmentally and culturally.
Although the Grímsstaðir landowners have already signed a preliminary contract with Huang’s company, the Icelandic government has yet to approve the project. Many Icelanders are firmly against a deal whereby 0.3% of the country—or, as stated by various media sources—the equivalent of the city of Hamburg, the state of Missouri, or a quarter of Hong Kong, might end up in foreign hands. Iceland’s Minister of the Interior, Ögmundur Jónasson told the Independent: “it has not escaped my attention that the Chinese have been very active in buying Atlantic properties.”
Could this deal possibly undermine Icelandic sovereignty?
Unlikely says Ben Chu of the Independent. As Chu points out, “Acquiring land does not give foreign nationals a right to do what they want with it…Meanwhile,” he writes, “Iceland should note its recent history: it’s often the investor, not the recipient of the cash, that stands to lose most when an ambitious deal is signed.”

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