- - Wednesday, November 30, 2011

China’s Icelandic gambit

Iceland is a small European country famous for its barren Arctic and volcanic terrain. The island nation is also a strategic spot in the North Atlantic that is crucial for European security.

As former Icelandic Ambassador to the United States Einar Benediktsson wrote in August in a U.S. Army War College publication, for more than 60 years since World War II, “Iceland’s geographic position made the country a vital link in the transatlantic relationship between the United States and the European allies and was the indispensable location for providing security in the North Atlantic when that security was threatened by the Soviet Union.”

But then in 2006, the United States unilaterally withdrew its military presence in the country, and after 2008, Iceland became one of the hardest-hit European states in the global financial downturn.

As a result, Iceland became a strategic vacuum and one of the weakest links of the U.S.-led NATO alliance.

And the Chinese recently tried to buy a big chunk of Iceland.

In late August, one of China’s richest businessmen, Huang Nubo, who had held numerous official positions in the communist central government, made a proposal to the Icelandic government to buy a huge, barren track of Iceland, 75,700 acres or 118 square miles in all, an area equivalent to the size of the Caribbean country of Grenada or the Mediterranean nation of Malta. The purpose of the purchase was to “develop ecotourism and golf courses.”

However, this strange and bold Chinese land gambit set off alarms within the Nordic country.

On Friday, Iceland’s Interior Ministry rejected the Chinese land purchase, which would have given Beijing 0.3 percent of the nation. The ministry cited concerns over national sovereignty.

Mr. Huang immediately lashed out in interviews with Chinese media expressing indignation at the rejection and charging Western bias against Chinese business investment. The official state-run Xinhua News Agency echoed Mr. Huang’s outrage.

China’s government has a history of using state-sponsored entities disguised as normal businesses to acquire strategic assets overseas for military and security purposes. The Soviet-designed aircraft carrier Varyag, for example, was bought in 1998 by a civilian Chinese business but ended up in the hands of the Chinese military. The refurbished carrier began its second set of sea trials on Tuesday.

History also shows China is inclined to establish footholds in faraway places, especially on Europe’s periphery, for its global strategic positioning. Tiny Albania was hailed for decades in China during the Cold War as Beijing’s strategic outpost in the heart of capitalist Europe and as China’s key global ally in its epic fight with the Soviet Union for communist ideological correctness.

India-China talks postponed

Two days of talks between Chinese and Indian diplomats, which were to have begun Monday in New Delhi, were canceled abruptly over the weekend. The topic was to have been the thorny border dispute that prompted a war between the two nations in 1962. The same border dispute has intensified greatly in recent months as the two nuclear-capable Asian countries are quietly building up military forces along the controversial border region.

Compounding the border dispute is an increasingly tense spat over the role of Pakistan in the region’s peace and security. India continues to view Pakistan as an enemy, based on deeply rooted grudges. Yet China considers Pakistan a key regional ally in its global efforts to counter what it perceives as U.S. schemes to stem a rising China.

To further complicate matters, China controls about one-eighth of the sensitive Kashmir region over which both India and Pakistan have made claims.

The reason the long-scheduled border talks were canceled, despite all these issues requiring the urgent attention of diplomats, was that China objected strenuously to an international religious conference that was to start on Sunday. The nongovernmental conference was to have featured a speech by the exiled Tibetan spiritual leader the Dalai Lama on Wednesday.

Since 1959, the Dalai Lama has led the Tibetan government in exile based in Northern India. Asked Monday to explain China’s objections, Chinese Foreign Ministry spokesman Hong Lei stated that China opposes any country that provides safe haven for the Dalai Lama, whom he called “a ‘splitist’ disguised as a religious leader.”

Miles Yu’s column appears Thursdays. He can be reached at [email protected]

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