by on December 7, 2012 at 3:10 pm in Law, Political Science | Permalink

If the deal is rejected [as would appear to be the case], Mr Huang said he would tell “the whole world that Iceland doesn’t welcome Chinese businessmen”.

Here is more, and here is background and here is my previous blog post on this episode.

1 Peter Schaeffer December 7, 2012 at 3:20 pm

“Mr Huang said he would tell “the whole world that Iceland doesn’t welcome Chinese businessmen””

I am sure the streets of Reykjavik will be wracked by riots tonight.

2 Chuck Currie December 7, 2012 at 4:04 pm

With only 4.5 hours of sunlight, they’d better hop to it.

3 Beans December 7, 2012 at 5:08 pm

I guess they’re willing to sacrifice some business to suit their anti-commerce sentiment post-financial crisis.

One hopes Canada is less resistant.

4 Peter Schaeffer December 7, 2012 at 9:11 pm

The people of Iceland would prefer to keep their country rather than sell it to foreigners for a very temporary economic gain.

Source logical and far-sighted to me. Maybe they have a discount rate below 100%. Shocking really.

5 dan1111 December 8, 2012 at 3:45 am

Imagine a Chinese guy wanted to buy some land in the U.S. that was the size of Massachusetts, Connecticut, New Jersey, Delaware, and Rhode Island combined. This would be the equivalent percentage of America’s area.

Would we allow that?

6 Rahul December 8, 2012 at 5:06 am

That’s a ridiculous comparison. How about $ equivalents? The purchase is not even worth, say, a ten-story apartment building in Manhattan.

He’s paying $8.8m for the entire parcel of land. Tempest in a teapot.

7 Peter Schaeffer December 9, 2012 at 12:09 am


Ever been to Iceland? That part of Iceland? Been to the Dettifoss lately? I have spent quite a bit of time their. Very impressive. Sell it for $8.8 M? Not for $8.8 billion. I am not a citizen of Iceland so I don’t get to vote. If I was, the answer wouldn’t be “NO”, it would be “HELL NO”.

8 Mohamed December 23, 2012 at 3:48 am

Well, this was all what was wanted and neeedd in the first place. Shame that Haarde still can’t bring himself to being diplomatic and honourable, instead spouting comments such as: We are isolated when all 27 EU member states agree that we have to reach an accord on Icesave . So this comment also means that he never intended to honour the guarantees’ in the first place.He and the current Icelandic government are a liability and have made an extremely bad impression on countries outside of Iceland. I’ve never seen Europe and the IMF to withhold help for so long and this comes all down to distrust in Haarde and Co. As Haarde said, 27 EU member states agreeing.. that’s quite a unanimous judgement of how he and his colleagues are perceived.I wish the Icelandic people all the best with getting through this crisis. It was really not at all up to the people that these catastrophes happened, it is very much up to them though whether the current government will remain and carry on messing things up.

9 The Captain December 7, 2012 at 4:07 pm

Can some famous economist please tell the media that the “fiscal cliff” is not something for us to be so frightened about?

They apparently won’t listen to all of us.

The Captain rides…

10 Miley Cyrax December 7, 2012 at 4:10 pm

Nonsense… we here in Iceland are perfectly welcoming to Chinese businessmen. We merely require higher bids from them than whites, and whites than blacks.

11 genauer December 7, 2012 at 5:02 pm

maybe the icelanders now prefer to pay their debt to the dutch and limeys.

5 billions in 2008, with interest, fees, should be 10 b by now ?

12 Givco December 7, 2012 at 5:49 pm

The dutch and limeys have failed to produce any promissory notes signed by Iceland.

13 genauer December 7, 2012 at 6:16 pm

I know, by now it is sovereign against sovereign in EEA courts.

But it is not my problem.
The Buba was a little faster than our dutch friends and english neighbors and seized all German owned assets in time from the criminal viking hordes : – )

I doubt that any european country would stand in the way, when they go to retrieve their property from Iceland. Earlier this year they tried to get into some currency arrangement with Canada. Interesting high level judicial discussion at the WCI blog.

14 TR W December 7, 2012 at 8:28 pm

Shame and guilt white people and they will cave. Hopefully, one day this tactic will no longer work. The intentions of this land grab are nefarious and Icelanders should reject it.

15 Peter Schaeffer December 7, 2012 at 9:09 pm

You definitely need to read more recent Icelandic history

16 Rahul December 7, 2012 at 10:50 pm

The part about how Icelanders managed to get their debt so high that it exceeded six times the nation’s GDP?

17 Alan December 7, 2012 at 11:00 pm

No-one gets to be that wealthy in China without close connections to the Party. If the Icelanders sell, they are ceding control of a big chunk of land to the Chinese government. We might soon find out how much the Chinese government is willing to pay to get a foot-hold in the North Atlantic.

18 Roy December 8, 2012 at 12:04 am

The continued belief that coherent independent states such as Iceland are inherently prostrate before the great powers astounds me.

If this is the case how did Mexico ever conjure up Pemex, or Nicaragua get free of Chiquita Banana? If the Icelanders agree to a deal with China and choose to renege at some later date, how exactly is China to retaliate? Ruin their credit rating?

This kind of thing hasn’t really worked since the 19th Century, and even then it worked only by great power collusion, almost instantly regretted in the case of the French in Egypt, or in complete backwaters like Ethiopia, the last case I can think of. Iceland is a lot of things, but it has strategic value to both North America and Europe that would protect it from any Asian state. And yet we in the capitals of finance gnash our teeth at Bolivia, Venezuela, Cuba, and even Zimbabwe.

Why is there such confidence that the multinational corporation or even state-backed firm has any potency over any nation state? It is delusional.

19 Milton December 8, 2012 at 1:18 am

Right. And Iceland is a part of NATO, so if it did ever get serious, NATO would be involved.

20 Mike in Qindao December 8, 2012 at 6:11 am

Has the thought occurred to you that the reason Iceland is part of NATO might be the same reason the Chinese want it?

21 Roy December 8, 2012 at 3:40 pm

Has the thought occurred to you that Iceland’s being a part of NATO may imply that the Monroe Doctrine still applies rather strongly in the case of Iceland. The very independence of the country is strongly reminiscent of much of the most condemmed moments of our Central American history. Not that I object at all.

22 Mike in Qingdao December 8, 2012 at 9:31 pm

Iceland is strategically significant because of its geographical location. During the cold war it was used as a barrier (along with greenland and the UK) to detect, monitor, and if necessary destroy Soviet submarines. At the time it could also be used to project air power into the North Atlantic. It was a crucial part of NATO strategy.

Today, Chinese have ambitions in the Arctic (oil and gas) as well as an alliance with Russia.

23 Peter Schaeffer December 9, 2012 at 12:19 am


Visit the place. It’s not exactly an American protectorate.

24 Peter Schaeffer December 9, 2012 at 12:18 am

Actually it works the other way around. In the Cold War, NATO needed Iceland far more than Iceland needed NATO. Something about an unsinkable aircraft carrier the size of Virginia.

Conversely, it worked the other way in WWII. The allies occupied Iceland and didn’t give the local much choice in the matter. Same reasons as the Cold War plus numerous superb deep water harbors (fjords) at both ends of the Iceland. All of the allied navies used them extensively. Critical given the effectiveness of German U boats and the severe wind and wave conditions that are typical of the North Atlantic.

The great powers don’t have quite so much need for Iceland these days. However, no one is going to send gunboats to Reykjavik to collect debts either. The most important point is that Iceland has real export industries to pay the bills (fish, aluminum, etc.). As such it get set its own way.

25 Peter Schaeffer December 10, 2012 at 1:30 pm

A minor historical note. The British occupied Iceland in the summer of 1940. We jointed the occupation in July of 1941, well before Pearl Harbor. Based on what I saw in Iceland, it appears that the Iceland people regard the foreign occupation(s) of WWII as an important historical event, but not an invasion or conquest.

26 Someone from the other side December 8, 2012 at 4:12 am

And Iceland would care about him telling that to the world exactly why? It’s not exactly like people are falling over themselves to sell stuff to the Chinese. Much better deal to buy stuff from them and finance it with their money (which we then do not let them spend again)…

27 stalin December 9, 2012 at 1:21 pm

Iceland doesn’t welcome Chinese businessmen.

Who does?

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