Does China seek Arctic foothold at Iceland?

China in Iceland

Some observers believe China is trying to get a foothold in the Arctic with the help of land acquisitions at Iceland.


Chinese business tycoon Huang Nubo, a real estate investor and former Chinese government official, seeks to buy 300 square km of land in northeast Iceland for what he says will be a unique tourism and golf resort project. If Icelandic authorities agree, Mr Huang and his Zhongkun Group will get land ownership of 0,3 percent of the country’s territory.

Several analysts now voice concern about the deal, arguing that Huang eventually could use the land for other purposes. Iceland is situated strategically in the middle of what in the future might become an important new maritime transport route between East and West. With the melting of ice in the Arctic and the increasing access to Arctic waters, the Northern Sea Route will open up for commercial shipping and Iceland become a new regional hub in international shipping.

Read also: China’s new foothold on Northern Sea Route

According to the Financial Times, Huang intends to spend almost 1 billion IKR (8.8 million USD) for the land and invest up to 20 billion IKR in the tourism project. The land in question is reportedly located near potential deepwater ports, and includes one of Iceland’s biggest glacial rivers.

Read also: Iceland invites China to Arctic shipping

For Iceland, which is a member of Nato and which currently negotiates on membership in the EU, the relations with China have over the last years got increasingly close. Last year, China engaged in a 500 million USD currency swap deal with Iceland. Icelandic President Ólafur Ragnar Grímsson hails the cooperation and has himself been in several high-level meetings with Chinese authorities.

As previously reported by BarentsObserver, the financial crisis which shook Iceland in 2008 resulted in a reorientation of the country’s foreign policy. Seeking credits and financial support, Iceland looked both towards Russia and China.

Read also: Iceland between EU, Russia, Norway

However, the Chinese interest in the Arctic is not only reflected at Iceland. Chinese interests are also increasingly evident in other parts of the region, including in Northwest Russia and northern Norway. As reported by BarentsObserver, a Chinese delegation earlier this year visited Murmansk to discuss issues related to the Northern Sea Route. The Chineseicebreaker “Snow Dragon” is this year also planning a historic trip along the Northern Sea Route on its way to Iceland and then the Northwest Passage along the coast of Canada on the return.