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Chinese tycoon revives bid to buy acreage in Iceland

Huang Nubo, a former Chinese government official and current chairman of Chinese Zhong Kun Group, speaks in front of a map of Iceland at a press conference in Beijing on Sept. 2, 2011.

LIU JIN/Liu Jin/AFP/Getty Images

Chinese tycoon Huang Nubo has revived his controversial bid to buy a vast tract of land in Iceland, just weeks after the deal was rejected by the government.

The deal, in which Mr. Huang sought to buy 300 square kilometres of wild heathland to build a resort, has sparked a heated debate within the Icelandic government over the role of foreign investment. In China it has come to be seen as epitomizing the prejudice that Chinese investors face abroad as Chinese companies step up overseas investments.

Representatives of ZhongKun, Mr. Huang's company, met Iceland's Ministry of Industry, Energy and Tourism on Thursday to discuss the possibility of pushing through a restructured deal. "We are looking for a new way to take this forward," Mr. Huang told the Financial Times on Thursday. "I am somewhat optimistic."

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The discussions centre on the idea of reclassifying ZhongKun's investment so that it would fall under the approval of a different ministry, thereby circumventing Minister of the Interior Ogmundur Jonasson, who issued the original rejection, according to a person familiar with the matter.

Mr. Huang, a mountaineer and poet who is also one of China's richest men, planned to use the land to develop a high-end nature resort where visitors would fly in by charter jet for a chance to appreciate the pristine wilderness.

Late last month Mr. Jonasson rejected ZhongKun's proposed investment because it contravenes Iceland's rules on foreign land ownership. The deal had also raised concerns about giving Beijing a strategic foothold in Iceland, whose deepwater ports are crucial for Arctic shipping routes.

However, that decision sparked a sharp backlash. A recent Icelandic cartoon depicted Mr. Jonasson as an axe murderer standing just behind a sign that read "Invest in Iceland," alongside another minister also wielding an axe.

"His decision had a real impact in Iceland, including on other political parties. Other people still want ZhongKun to invest," Mr. Huang said. He says he was recently contacted by the Ministry of Industry, Energy and Tourism to revive discussions over the deal.

Meanwhile, Mr. Huang says he is also being courted by other northern Europe countries who seek to attract investors, including Denmark, Sweden and Finland. He is even considering setting up a consortium of Chinese companies to invest in northern Europe.

The Iceland saga has made Mr. Huang a national celebrity in China, and his rugged features are often seen on display on Chinese newsstands.

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"In China the reaction has been very strong," he said. "People feel like the outside is unfriendly to Chinese investment, but that is something I don't want to see."

Iceland's debate over foreign investment will soon be heard in parliament, where a proposed new bill on foreign investment would make it easier for foreigners to invest. Opening up to foreign investment was one condition set by the International Monetary Fund when it bailed out Iceland in 2008.

Copyright The Financial Times Ltd. All rights reserved.

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