Chinese Billionaire Huang Readies Iceland Bid on Power Shift

Chinese billionaire Huang Nubo is ready to put money into developing property in Iceland as the new government reviews investment laws that had blocked his previous bids.

“If we get a positive reply from the government, we can start the groundwork,” Huang’s Akureyri, Iceland-based spokesman, Halldor Johannsson, said in a telephone interview. “We’re waiting for feedback from the authorities.”

The coalition of Independence and Progressive parties that won April elections has signaled it may ease limits on foreign land ownership that had stymied Huang’s earlier bids. The billionaire had planned to spend $200 million on developing an Icelandic resort and a mountain park through his company, Beijing Zhongkun Investment Group Co. The 300 square kilometers (116 square miles) of land would become a platform from which to invest elsewhere in the Nordic region, he said in 2011.

Internal Affairs Minister Hanna Birna Kristjansdottir “has met with representatives of Huang Nubo and explained to them that the laws on direct foreign investment need to be reviewed in their entirety,” her spokesman, Gisli Freyr Valdorsson, said by phone. “Not in light of this particular matter only; that review will likely take place this winter.”

Circumventing Rules

To circumvent restrictions on foreign land ownership, local government representatives had sought to buy the property and lease it to Huang. That model also met resistance from the previous Social Democrat-led government. The billionaire is now hopeful that a leasing arrangement will be accepted by the new government, Johannsson said.

Huang, who has properties in California and Tennessee, is known for helping restore the 200-year-old villages Xidi and Hongcun around Huangshan mountain in China’s eastern Anhui province, which are now included on the UNESCO world heritage list. The company built and operates resorts near the villages, according to Beijing Zhongkun’s website.

Iceland Prime Minister Sigmundur David Gunnlaugsson has signaled the $14 billion economy needs more investment to propel growth. The nation is still recovering from its 2008 financial meltdown, in which its biggest banks defaulted on $85 billion in debt. The ensuing economic collapse sent the krona into a free-fall and prompted the government to seek a bailout, backstopped by capital controls.

Opposition Stance

The opposition has also signaled it’s open to Huang’s investment.

“The Social Democratic Alliance is positive toward foreign investment in general,” Arni Pall Arnason, party chairman, said in a text responding to questions. “We don’t have any preference for a particular nation when it comes to positive matters, and Iceland certainly needs foreign investment.”

Still, investment should be made for “genuine business purposes” and not as some “cynical plans of superpowers,” he said.

Iceland has this year stepped up efforts to boost its relations with China. In April, it became the first European nation to sign a free trade agreement with China in a bid to sell its expertise in geothermal energy to the $7.3 trillion Asian economy.

President Olafur R. Grimsson said yesterday he will meet with China’s ambassador to Iceland to discuss “the participation of Chinese science institutes and other parties in the Nordic conference Arctic Circle,” which the Atlantic island is due to host this fall, according to his website.

The land Huang wants to lease, which is located in Iceland’s north, is three-quarters owned by six private individuals, while the state owns the rest. Huang’s initial bid in 2011 was rejected by owners representing 2.8 percent of the land, according to state broadcaster RUV.

“Completing the planning work and dividing the land may take a couple of years,” Johannsson said. “I’m also positive that other projects, that have been discussed and pointed out as possible projects, will take off once this project gets off the ground.”

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