Hu Bin shakes hands with Nakheel, owner of the World Islands, in October 2007 after clinching a deal to purchase the Shanghai Island for US$28 million. [File photo]

When Wenzhou entrepreneur Hu Bin became the first Chinese investor in Dubai's World Islands project in 2007 and bought the 30,000 sq m "Shanghai Island", he was regarded by his hometown media as the nation's hero. However, two years later, his investment is being scoffed at as a loser's bet as work has come to a halt.

Dubai, a desert city built on a construction boom funded by billions of oil dollars, is now stuck in a financial crisis. And Hu's Shanghai Island project isn't showing any signs of work resuming. But Hu insisted that his investment in the petroleum-rich emirate was right. "I'm quite well and I still expect a rosy outlook in Dubai investment," he said.

Formerly employed by China Construction Bank at a Wenzhou branch, Hu built a broad personal network in the banking arena that helped him open a business in the early 90s to provide a private financing service. He later shifted his focus to property development, founding Zhongzhou International Group Co in Shanghai in 1998.

"Wenzhou natives are very united and that's the key to our collective success," Hu told China Daily. Hu said when a Wenzhou person noticed an investment opportunity, he would introduce his family and friends to it to make wealth together.

Hu's Dubai adventure was encouraged by his hometown compatriots. But his decision to put money there was made after a personal visit. "I went to Cambodia and Vietnam on investment projects, but didn't find interesting things. As soon as I arrived at Dubai, I was deeply impressed with its vibrancy and beauty," he said. The Shanghai Island project became his first investment in Dubai.

Shanghai Island is a separate part of the World Islands, which is a collection of man-made islands shaped into the continents of the world, located off the coast of Dubai in the United Arab Emirates. It will consist of more than 300 small private artificial islands divided into four categories - private homes, estate homes, dream resorts and community islands.

On October 9, 2007, Hu signed a deal with Nakheel, owner of World Islands, to purchase Shanghai Island for US$28 million. Hu planned to spend another 1.5 billion yuan (US$219.68 million) developing it as a coastal resort.

But the world financial tsunami called a stop to the entire World Islands project, including Hu's Shanghai Island.

"Up to now I have only paid 60 million yuan as a down payment," Hu said, adding the Dubai people allowed him to delay payment because of the unstable financial situation.

"I plan to build 60 villas on the island, in more than 10 different Western styles, including American, French, Italian, Spanish, British, and German - similar to the diversified building styles along the Bund in Shanghai," he said.

Although each of the villas will be sold at about 100 million yuan, Hu was confident about sales. "I received several checks soon after I signed the Shanghai Island project. All the clients are interested in the blueprint of the island villas," he added.

In spite of the grim situation there, Hu remains optimistic about Dubai's future. "I have many friends doing all kinds of business there, and their businesses haven't been hurt much by the recent crisis so far," he said.

Hu didn't say when the suspended project will resume, but he has decided to copy a Shanghai Island in Dianshan Lake in Kunshan, Jiangsu province. "It will be a recreational center consisting of villas and all the entertainment facilities beyond your wildest imagination: golf driving ranges, swimming pools, basketball courts, tennis courts, beaches, a helipad, seaplanes, fishing, et cetera," Hu said.

Hu invested 2 billion yuan in the Dianshan Lake version of Shanghai Island, and as many as 150 luxury villas will be built on the 150,000 sq m area. So far, the first phase of 28 villas has just been completed. They will go on sale after the Chinese New Year. "I am pretty sure the villas will be sold out right after we release them," he said.

The villas at Dianshan Lake will be cheaper than their Dubai twin, priced between 10 and 20 million yuan each. The whole project is due to finish by 2011 in three phases.

Property prices in Dubai were reported to have shrunk nearly 50 percent from their peak in 2007, with little sign of recovery soon. Dubai's 20,000 Wenzhou entrepreneurs are estimated to have lost more than 1 billion yuan, said Zhou Dewen, head of the Wenzhou Small and Medium Enterprise Business Development and Promotion Association.

(China Daily January 4, 2010)