China Tycoon Defends Bid for Chunk of Iceland
The chairman of one of China's leading real estate investment group's Beijing Zhongkun, made famous by his $8.8 million bid to buy a 115 square mile farm in Iceland, says the deal would have been very profitable had it gone through.
Huang Nubo, founder and chairman of Beijing Zhongkun Investment Group, told CNBC that unlike most state-owned companies who think short term, his plans to invest in Iceland was for the long haul.
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"Many people think Iceland is very remote but if you think about it in the long run, in 10 years... If the ice caps melt in the North Pole, then Iceland property will become very expensive because it's the only way that a lot of ships need to pass to go to Europe," Huang said on the sidelines of the China Entrepreneur Club's Annual Summit of Green Companies in Kunming, located in the country's southwestern Yunnan province.
"So 300 km (115 sq miles) in that area will be very profitable for me," he said.
The Chinese billionaire's plan to invest $200 million in property in the north Atlantic country was thwarted for a second time in December last year after reports the Iceland government was unable to make a final decision on Huang's application. That followed a rejection to his land bid a year earlier, with the government citing opposition to foreign ownership of property in Iceland.
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Huang's ambitious plans had raised controversy and suspicions of Chinese expansionist policies, because of the strategic location of Iceland between Europe and the U.S. and its closeness to the Arctic where a number of nations are competing for resources.
But the tycoon says his bid was no different than previous investments his company has made in remote regions of China.
"A lot of people question why a Chinese person would go so far to invest in such a remote area," Huang said. "But if you look at my track record in China, I look at areas such as Pu'er in Yunnan province or Kashgar in Xinjiang province. These are all remote locations and now I own some of the most valuable land in those areas."
Beijing Zhongkun owns property and resorts in China and several other countries including U.S. cities like Nashville and Los Angeles. Huang had plans to use Iceland as the base for a tourism chain in the Scandinavian countries of Denmark, Sweden and Finland.
Despite the push for foreign expansion, Huang said the firm will continue to focus on China where urbanization presents more opportunities.
"In China, only 50 percent of all urbanization has been completed, while Europe is in a recession and probably needs another 10 years to recover," Huang said. "We still want to focus on China and perhaps in 10 years, return to Europe when the debt crisis has improved."
- By CNBC.com's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu