BEIJING ? Iceland is having a China crisis.
Devastated by a banking collapse, the North Atlantic nation welcomed a Chinese real estate tycoon's plan to buy a remote, treeless tract of wilderness for a resort. Then critics raised questions and Iceland had second thoughts.
Was this cover for Beijing to gain a strategic foothold? A way to gain access to a deepwater harbor ? even though it lies some 50 kilometers (35 miles) away ? or fresh water from a glacier-fed river? And should a foreigner be allowed to buy the equivalent of 0.3 percent of Iceland's territory?
Developer Huang Nubo defended his project Friday, saying it would simply be a high-end resort and that it would preserve the local environment and Icelandic culture.
Huang, an avid mountain climber, rejected suggestions by critics that the project might be a covert attempt by Beijing to establish a presence. He said the site in Iceland's northeast is slated to be one of a string of exclusive nature retreats in China, the United States and Scandinavia.
"This is all private investment," said Huang, a 55-year-old former government official, at a news conference at his company's Beijing headquarters tower.
Iceland's prime minister, Johanna Sigurdardottir, said this week the country welcomes the investment. The interior minister, Ogmundur Jonasson, said the government, which limits land ownership by foreigners, was reviewing environmental and other aspects of the proposal before it decides whether to give approval.
Huang has agreed to pay private owners 1 billion Icelandic kronor ($8.8 million) for 300 square kilometers (120 square miles) in the country's northeast. The government also owns a portion of the land, known as Grimsstadir.
The proposal is in line with Iceland's hopes to promote both foreign investment and tourism, said the country's ambassador to Beijing, Kristin Arnadottir, who appeared with Huang.
"Perhaps we are going to experience something much more positive as Iceland becomes a tourist destination," she said.
The Icelandic public initially favored the plan.
But opposition arose as critics questioned whether it really was a tourism project and, even if it is, whether such a huge land sale is right for a country with just 320,000 people.
Among the naysayers is Jon Thorisson, an architect who has campaigned against foreign ownership of Icelandic resources. He said that in tiny Iceland the deal is the equivalent of the United States selling the state of Missouri.
"Will large-scale ownership allow them to exert political influence?" he said. "Is it possible that we Icelanders will end up like tenant farmers on our own land?"
The anxiety in Iceland echoes sentiments heard in the United States and other economies as China steps up investment abroad, prompting challenges by critics and questions about the communist government's role in business activity.
In the highest-profile deal, state-owned Chinese oil company CNOOC Ltd. withdrew a bid in 2005 to buy U.S. oil and gas producer Unocal Corp. after some American lawmakers complained it might jeopardize national security.
But most of China's other investments in the United States and elsewhere cause little controversy and many governments actively court Chinese money.
Huang founded his company, Zhongkun Group, in 1995 after working in the government's propaganda department and Ministry of Construction. It has built residential and commercial projects throughout China. Huang ranked 161st last year on Forbes magazine's list of the richest Chinese entrepreneurs with a fortune estimated at $890 million.
Icelandic critics also question his project's feasibility.
Huang's plan calls for 10,000 guests a year. Access would be a 2 1-2-hour flight from the capital, Reykjavik, to the town of Akureyri in the island's north and then either another flight or a drive over rural roads.
Andri Snaer Magnason, a popular writer and eco-activist, said the plan reminds him of jetsetting Icelandic bankers who overpaid for assets and wrecked their industry.
"It lacks all sense and logic," he said.
Huang said the resort would offer golf, mountain biking and sightseeing by plane.
"Nature there is very beautiful," Huang said.
He showed reporters photos of the grassy site with snow-blanketed hills in the distance and of himself, grinning broadly, meeting Iceland's president and visiting farmhouses during a visit there.
"That was the best Iceland promotion that I've seen for a long time," said Arnadottir, the Icelandic ambassador.
Huang said he hopes to win approval from the Chinese and Icelandic governments by February and to have completed the first phase of development by 2015.
Huang rejected suggestions his project was part of a possible Chinese government effort to gain access to a harbor on Iceland's northeast coast. He said he might buy a ship to bring in European tourists but otherwise his plans had no connection to the harbor.
"If it involved politics or any other background (than tourism), I wouldn't go there," he said.
Huang said he was unaware of the controversy in Iceland until he returned to Beijing after a trip to Tibet this week.
"I found the whole world was looking for me," he said.
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Sigmundsdottir reported from Reykjavik.
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