Chinese Investor Finds It Isn't Easy to Buy Part of Iceland

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Chinese real estate investor Huang Nubo has a vision: buy over 100 square miles of Icelandic land in the remote northeastern Grímsstadir á Fjöllum region for around $9 million, connect the Vatnajökull National Park with the Jökulsárgljúfur gorges (see photo above), and sink about $175 million into building a tourist destination for replete with a five-star, 120-room hotel, an 18-hole golf course, horseback riding facilities, and a separate five-star, 300-room hotel in the capital, Reykjavik, to host international conferences and house Huang's Icelandic headquarters (an airline might shuttle tourists between the two hotels). "There are places like Iceland, especially its northern part, which are the future paradises of environmental tourism," Huang recently told Iceland's Morgunbladid. He added that he'd been in love with Iceland ever since lopi (Icelandic wool) kept him warm 30 years ago while he was studying at the Peking University with Icelandic friends.

What a heartwarming story! Well, until we get to the complications. While Huang has reached a preliminary deal with private landowners, The Financial Times explains today, the Icelandic government has expressed concern about the tycoon and former Communist Party official purchasing what amounts to 0.3 percent of Iceland's told area. "China has been very active in buying up land around the world so we need to be aware of the international ramifications," interior minister Ögmundur Jónasson told The Financial Times. The paper explains that while Iceland may only have a population of 320,000, it "occupies a strategically important location between Europe and North America and has been touted as a potential hub for Asian cargo should climate change open Arctic waters to shipping." The Grímsstadir á Fjöllum region, moreover, is close to potential deepwater ports and includes one of Iceland's biggest glacial rivers.

In an effort to assure Icelanders that he's not trying secretly to further China's geopolitical interests, Huang has promised to renounce all rights to water running through the land. Yet while Iceland's foreign minister, Össur Skarphédinsson, has indicated that the country--still reeling from its 2008 banking crisis--welcomes foreign investment and the development of Iceland's tourism industry, it's not entirely clear whether the deal will go through. Ögmundur Jónasson, the interior minister, says he must study the country's laws and constitution before he can approve the purchase (Huang must apply for an exemption from laws barring non-EU nationals from buying land). "We have to discuss it and not swallow without chewing; would we find it all right if the entire country were sold this way?" Jónasson asked, according to the Iceland Review. But Iceland's minister for industry, Katrin Juliusdottir, doesn't share Jónasson's worries. There's "no reason to get hysterical just because one Chinese man wants to buy some land and invest in tourism in Iceland," she told reporters.

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