Chinese investor blasts Iceland rejection

Nov. 29, 2011 at 6:36 AM

BEIJING, Nov. 29 (UPI) -- A Chinese billionaire whose bid to build an eco-resort in Iceland was rejected says security concerns about his project were unfair and misplaced.

Huang Nubo's plans to buy a 115-square-mile tourist farm in northeastern Iceland and turn it into a high-end resort featuring hot-air balloon rides and a golf course were rejected Friday by Iceland Interior Minister Ogmundur Jonasson, who cited the country's laws on foreign investment.

He also said the sale of such a large area of land -- fully 0.3 percent of the country's landmass -- to foreigners was unprecedented and represented a possible threat to the Iceland's independence and sovereignty.

But Huang, chairman of the Zhongkun Investment Group, said Sunday the rejection smacked of anti-Chinese prejudice while some reports indicated Icelandic officials were concerned about the geopolitical implications of allowing a Chinese foothold near its Arctic deep-water ports.

"The denial reflects the unjust and parochial investment environment facing private Chinese enterprises abroad," Huang told the English-language China Daily newspaper.

In the interview, he pointed a finger at Western countries for employing "double standards," asserted that while they are eager to "encourage the opening of the Chinese market," they "close their doors to Chinese investments."

He urged fellow Chinese entrepreneurs to think twice before investing in Europe or risk being caught up in political fights they not have anticipated.

Bao Yunjun, chairman of the Private Economy Research Association at Zhejiang University, told the newspaper the rejection of the planned $200 million project is evidence of a lingering Cold War mentality that maintains "investment from private Chinese entrepreneurs is a threat to national safety."

Iceland's foreign ministry initially welcomed Huang's announcement of a major investment in the debt-strapped country, saying it would be a boon to tourism and could serve a link between the Vatnajokull and Jokulsargljufur national parks in the glacial and mountainous northeast region.

Huang's reputation as a poet and world traveler -- he climbed Mount Everest -- also proved attractive.

But critics also noted his close ties to the Chinese Communist Party, having worked as a minister in the Chinese Central Propaganda Department and Ministry of Construction, the BBC reported.

His bid ran into trouble when he applied for an exemption from laws barring non-EU nationals from buying land. Jonasson rejected that request last week.

A statement on the Interior Ministry's Web site cited laws requiring that companies purchasing real estate have headquarters within Iceland and that the majority owners be Icelandic citizens.

While the ministry has the power to grant exemptions from the requirements, Jonasson said he chose not to do so because "it is impossible to ignore how large an area of land … is involved in the purchasing plans of the company, and there is no precedent for such a large area of Icelandic land to have been placed under foreign control."

To make an exception to the law in Huang's case would set a "dangerous precedent," he told the Financial Times, adding he was troubled by the "fire sale" character of the transaction.

"When a nation is in distress and its currency is weak, that is the time to be on your guard against those who would attempt to buy our national resources cheaply," he said.

The minister had previously warned of the "international ramifications" of such sales, the BBC said.

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