China’s Icelandic conqueror

An overseas deal has shot a Chinese property mogul to overnight fame, but have his motives been misunderstood? Zhang Yuqun went to meet billionaire investor, adventurer and poet Huang Nubo.

Editor’s note: In September, chinadialogue translated and published a Financial Times article about Huang Nubo, a Chinese property tycoon and would-be owner of 300 square kilometres of the Icelandic wilderness. The article looked at the concerns of some in Iceland and elsewhere about the expanding overseas interests of Chinese investors. So what’s the view from China? Southern Weekend has since published its own profile of Huang, which we reproduce here with permission.

One day in late September, Huang Nubo arrived in Tacheng, a remote corner of western China near Xinjiang’s border with Kazakhstan, where he is thinking about building a resort. An 80-year old woman at the airport recognised him: “Aren’t you that businessman buying land in Iceland?” she asked. The Chinese tycoon on a mission to purchase 300-square kilometres of Icelandic land – 0.3% of the country’s landmass – has become a household name in both countries.

Huang stands 1.92 metres tall and has the face of a keen mountaineer, weathered by high-altitude sunlight. He is also fond of writing poetry, has a mild manner and speaks concisely, always with a smile. Until recently, Huang was better known as an adventurer than a tycoon. On April 13 this year, he reached the North Pole, becoming one of very few people to have made it to both poles as well as climbing the highest mountains on all seven continents.

But returning to Beijing from a trip to Tibet in early October, Huang discovered his fame had entered a new league:
The whole world was looking for me,” he says. Just as in the 1980s the purchase of the Rockefeller Center and other US landmarks came to represent a rising Japan, so has Huang’s venture become a symbol of the globalisation of Chinese business.

“[The Iceland land purchase] should be approved soon, or maybe not, it’s hard to say. There’s a lot of opposition to Chinese companies overseas,” Huang tells Southern Weekend.

On October 8, Iceland’s Ministry of the Interior requested Huang provide his business license and a detailed investment plan. China’s Ministry of Commerce has also formally requested that Huang’s company,
Zhongkun Investment Group, report to the State Council, China’s highest administrative body, on its purchase of land in Iceland. Normally the deal would only require approval from Beijing’s business authorities.

On the sixteenth floor of Zhongkun Plaza in Beijing, Huang’s 200-square metre office seems more like a zoo than a place of work. Four grey cats – British Shorthairs – are playing, while a rabbit hops around and, outside, two monkeys cling to a tree enclosed in a cage. In a relaxation area on the second floor of the office, two parrots sit on a perch. Huang is the only person who dares get close to their long, sharp beaks. All in all, it is not the traditional office of a Chinese businessman.

Before going into business, Huang worked for the Chinese government’s Central Propaganda Department for 11 years.

Nubo, which means “angry wave”, was not his given name. Huang was born in 1956 in the western Chinese city of Lanzhou and named Yuping – “Jade Peace”. When he was two, his family moved to Yinchuan, a city in Ningxia Province in the north. In 1960 his father, a soldier, was accused of being a counter-revolutionary after an argument with the local Party secretary, and committed suicide. His mother worked on a building site to provide for her family, but died suddenly when Huang was 13. Three years later, at the age of 16, as Huang was watching the waves of the Yellow River smash into its banks one day, he decided to change his name: “I made a resolution to join a production brigade and bid farewell to my former life. I wasn’t calm, I was angry.”

As part of China’s campaign to send young people to live in the countryside, Huang was sent to Tonggui county near Yinchuan, where his active community participation made him a minor celebrity. He formed a basketball team and joined the Communist Party at the age of 18. In 1977, university entrance exams restarted, and Ningxia was given a single place at Peking University to award to a local student. It was decided that place would be given to someone from Tonggui, and Huang Nubo was put forward as he was considered “educated, able to write poetry, a good educated youth and supported by the masses.” Opportunity had knocked, and Huang opened the door – first to Peking University, and later the Central Propaganda Department.

But just as his official career was looking bright, Huang started to feel uneasy: a turning point seems to have come at the age of 29, when he read Anton Chekhov’s short story
The Death of a Government Clerk which, he says, brought him out in a cold sweat. And so he went into business, starting off doing small deals buying and selling goods, and eventually in 1995 setting up his own company, Zhongkun Investment Group.

In 1997, Huang and a fellow student at the China Europe International Business School, Li Ming (now executive chairman of the board of
Sino-Ocean Land Holdings) made 50 million yuan (US$7.9 million) in a property development deal in Beijing. Zhongkun went on to win further big projects and Huang’s wealth started to accumulate.

But at the same time, he grew increasingly uneasy about China’s get-rich-quick property industry, which he says was creating “corporate animals”, pulling people in from all directions. At an auction of land in Beijing’s central business district in 2004, Huang found himself competing with people who normally sold pharmaceuticals or animal fodder. “That’s when I realised there were going to be problems,” he says.

So Huang took the profits from his last deal and moved into tourism development. His employees were confused – in 2004 the property market was booming and some thought that by shifting its focus Zhongkun was missing an opportunity. Huang retorted that there are always going to be people tougher, richer and more reckless than you. Why fight them for limited resources?

Huang explains that his strategy is to not compete, but to do something that nobody else is doing: to innovate.

This year, the Forbes’ China Rich List put Huang, with an estimated fortune of 6.25 billion yuan (US$984 million), in 129th place: not exceptional. But his
Icelandic expedition has made him an overnight star. The man the Icelandic call Kinrerjinn, “that Chinese man”, has reached a deal with six Icelandic farmers to buy almost 0.3% of the country’s land for a total of US$8.8 million (56 million yuan). Huang plans to invest US$200 million (1.3 billion yuan) building a resort here, complete with a hotel, golf course and racecourse. Huang and Iceland go back a long way: at Peking University, he made friends with an Icelandic student, whose wife went on to become a high-profile politician, first as mayor of Reykjavik and later as foreign affairs minister. This relationship has helped Zhongkun’s dealings with the Icelandic government.

Some of Iceland’s politicians are worried, among them interior minister
Ögmundur Jónasson, who told the UK’s Financial Times: “China has been very active in buying up land around the world, so we need to be aware of the international ramifications.” The Financial Times looked at Huang’s government background as an official with China’s Central Propaganda Department and construction ministry, and the argument that China’s interest in Iceland’s geopolitical role may lie behind the deal. Those are the kinds of voices Huang is most worried about.

But Iceland’s president, Ólafur Ragnar Grimsson, is backing Huang, saying he is just an ordinary investor.“Nobody talked about geopolitical implications when Iceland flooded its valleys to create hydroelectricity for western aluminium companies,” he told the Financial Times. “But when a Chinese poet wants to build a hotel, everyone goes crazy.”

It seems Huang also has strong support among the Icelandic people: 65.6% of respondents to a local media survey of 320,000 residents said they backed Chinese investment. “Even if the Icelandic government vetoes the deal, the farmers who’ve signed contracts with me can take the government to court,” says Huang.

China is on a global shopping spree, which is both remoulding the global economy and giving rise to fears of “barbarians” among foreign conspiracy theorists. The fuss about Huang’s land purchase in Iceland is perhaps part of this broader picture. He sighs and points to a Japanese magazine on his desk. “Ten years ago, they complained the Chinese market wasn’t open enough, wasn’t international enough. Three years ago, they complained of ulterior motives when state-owned firms bought overseas mines. Now, a private entrepreneur wants to invest in tourism, and they’re still sensationalising and trying to block it.”

But it looks like the problems facing the deal may ultimately only benefit Huang and his company. He says some of his friends are even jealous of the publicity Zhongkun has received: “They all ask how they can do the same.”

Huang has spent the last five years looking for investment opportunities outside of China, as part of his plan to build a global resort empire. In 2005, he tried to invest in Kyrgyzstan, where he wanted to build a marina at Issyk-Kol Lake, formerly a testing ground for the Russian Navy, and link this with his operations in Xinjiang in China.

Initially, the project was welcomed by the government, but as soon as plans were made public, the story spread in the media that the investment was a cover for China’s nuclear submarine programme, and the Russian defense minister even paid Huang a visit to persuade him to back off. Meanwhile the rules of working with local politicians worried him. “Several of their senior officials asked me straight how much of a stake I could give them. I got scared – you can’t go so far as to bribe people.”

Huang also met with failure in Japan. He wanted to buy land for a resort in Hokkaido and had local government support. But when it came to negotiating with the unions, he hit problems, as many of the workers said they wouldn’t work for a Chinese boss, or a woman. “So I quit. When it comes to Japan, I’ll stick to doing poetry readings,” Huang says.

Despite the setbacks, Huang still has global ambitions for Zhongkun. In the United States, he already has a 10,000-square metre office building in Los Angeles, a 10,000-square metre ranch in Tennessee and a stake in a Los Angeles bank. “This decade is going to be an opportunity for Chinese firms to obtain resources, as the financial crisis is forcing the global economy to change. In 10 years time, when the economy is back on track, you won’t be able to get those resources anymore.”

That sense of opportunity has led him to temporarily set aside his mountain-climbing and poetry in order to given all his attention to Zhongkun’s expansion. “My dream for the next decade is to turn Zhongkun into a world-class chain of resorts,” he says. But he hasn’t lost his dual-identity as property-developer and poet just yet. He’s published a number of poetry collections, and has even been known to recite some in interviews.

At the end of October, he is due to attend a banquet held by the UK’s Financial Times in Shanghai. “A lot of distinguished people will be there, and I’m going to give a speech,” he says. “I’ll try and explain to them what Chinese entrepreneurs are really all about.”

Zhang Yuqun is a journalist at
Southern Weekend, where this article was first published. 

Homepage image from Zhongkun shows Huang Nubo