Chinese firm insists Iceland investment plan just business

Updated: 2011-08-31 17:41


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BEIJING - Beijing-based Zhongkun Group Chairman Huang Nubo Wednesday said his company's plan to build a resort in Iceland was purely commercial, after the Financial Times reported that opponents of the project have warned it could be political in nature.

Zhongkun, a private real estate company founded in 1995, plans to buy 300 square km of land in Iceland and on it build a high-end resort with a total investment of $200 million.

The resort will include a hotel, golf course and areas for outdoor activities, Huang told Xinhua in an interview.

Already owning several real estate projects in China and the United States, Huang said he was interested in Iceland because it has tourism potential.

Although the project may not make profits immediately, the beautiful landscape and natural environment would attract global travelers to the resort, Huang said.

The Financial Times on Tuesday quoted opponents of Huang's project as saying that it could provide a cover for China's geopolitical interests.

"The project is a purely commercial move and has no connection with politics. The concerns are groundless," Huang said. "I believe the project will benefit both my company and locals."

Huang confirmed that he used to work for the Publicity Department of the Communist Party of China (CPC) Central Committee and the Ministry of Construction in the 1980s and early 1990s.

"I was an ordinary official then and quit the government jobs a long time ago. It is absurd to draw the conclusion that my company has government support," he said.

Besides business motives, Huang has a personal connection to Iceland.

He used to share a dorm with an Icelandic student visiting Peking University in the 1970s and they became good friends.
Last year Huang donated $1 million to set up a foundation to support exchanges between Chinese and Icelandic poets, which sponsored the first Chinese-Icelandic poem festival.

"I first visited Iceland when I traveled there to attend the festival. Its landscape impressed me very much and local business people expressed that they were interested in attracting Chinese investment," said Huang, who is also a skilled mountaineer.

The land deal has been agreed between Huang's company and the landowners but still needed approval from the Icelandic government.

The investment project should also be approved by the Chinese government. The company submitted the application on Monday and it will take a maximum six months for Chinese authorities to make a decision, Huang said.

As the land includes one of the biggest glacial rivers in Iceland, Huang has promised to give up rights to exploit water resources and planned to establish an expert team to evaluate environmental impacts of the project.

China is encouraging domestic companies to invest abroad as an effort to divert the investment risk of its 3-trillion-dollar foreign reserve from buying foreign government debts.

Huang was not the first Chinese investor facing so-called political or security concerns while doing business in foreign countries.

Mei Xinyu, expert with the Chinese Academy of International Trade and Economic Cooperation, told Xinhua that some people in the West have not changed their Cold War mindset and regarded China as a new challenger.

"It will take time for other countries to understand that Chinese investment will play a positive role," Mei said.

Insiders have estimated that direct investment from Chinese companies in foreign markets might reach $1 to $2 trillion in the next decade.