Luxembourg looks toward exciting year
After five years of activities at the Luxembourg Trade and Investment Office (LTIO, ), the relationship between Taiwan and Luxembourg has made a great deal of progress. Ahead of this year’s National Day, The China Post met Hugues Mignot, executive director of the LTIO.The following is an edited transcript of the conversation.
Mr. Mignot: Two hundred years ago, a few weeks before the battle of Waterloo, the congress of Vienna reshaped Napoleon’s empire, resulting in the creation of three new nations which later were to be conglomerated under one ruler, King William the 1st, Prince of Orange: Grand Duke of Luxembourg and King of Belgium and Holland. The Benelux was born before the letter.
Without entering into the details, the situation of Great Britain in the European Union, the drama of the migrants and the Trans-Atlantic negotiations are important issues to remain on the Commission’s agenda, not-to-mention the Greek situation which will have to be followed on a daily basis. As far as the transatlantic negotiations are concerned, it is for sure that the Transatlantic Trade and Investment Partnership (TTIP) will not be concluded during the Luxembourg presidency but discussions will at all costs need to continue.
Recently the minister of foreign affairs stated that one of his priorities is the rebranding of Luxembourg to shred away an outdated image of a tax paradise. On track for the new government is also the pursuit of economic diversification from Luxembourg’s banking and funding industry.
One such diversification is a fast growing ICT sector, now ranking in the world top 10 in terms of infrastructure. It represents more than 7 percent of Luxembourg’s national income thanks to substantial public and private investments, amounting to 4 percent of Luxembourg’s GDP. Now 40 percent of Europe’s Tier IV Data Centers are located in Luxembourg and are about to reach the level of importance that the financial sector represents, with a total capacity of more than 40,000 m², and a turnover of more than 10 billion euros, not including substantial investments in high-speed electronic data highways to all major European capitals.
As it emerged out of the financial and funding industries, as a need for Luxembourg’s banking, funding and wealth management industries, the new digital economy offered initially platforms free of security breaches and intrusions, which, as we all know, have become a major concern for the management of private and public information. With its long tradition of bank secrecy, Luxembourg will continue to innovate in the field of electronic and privacy safety, and is now hosting, for example, data from the European Commission, Interpol, etc.
As a matter of fact several major Taiwanese ICT manufacturers have decided, or are contemplating, to locate their cloud business in Luxembourg to better serve their international clients and offer two-way e-commerce business infrastructures to Asian companies eager to integrate a fast-developing digital economy of a common Asian and European market.
The Luxembourg government has been very cooperative in offering capital and other incentives to interested Taiwanese companies within the “competition” regulatory framework of the European Union. It is therefore no surprise that the annual “ICT Spring Fair” in Luxembourg increasingly attracts Asian start-ups interested in initiating European e-ventures through a Luxembourg springboard.
Diversification now also takes place, similar to Taiwan, into the newly emerging biotech and eco-tech initiatives. The presence of Big Data hosting facilities, as integrated bio banks and the presence of Europe’s youngest university offer ways and means of putting Taiwanese companies on the European bio medicine map.
If the terminology of “circular economy” is now well introduced, the concept of recycling is not new. But today even more than before the Luxembourg government is encouraging all initiatives allowing us to save millions of euros in de-wasting technologies.
A good example of diversification in the field of traditional logistics, it is worth noting that Luxembourg has now direct train-to-sea links with Turkey and encouraged the investment in a brand-new Freeport, exclusively devoted to high-value storage and trading of art, similar to other art storage places in Geneva, Singapore and very soon Beijing.
The Deputy Prime Minister of Luxembourg, Etienne Schneider, visited the “Paris Airshow” last weekend, as he believes in the potentials offered by the space industry. He was certainly thinking of how the successful SES Company can serve additional video and other data streaming to the European public and international public, considering that digital pay television penetration does not exceed, in certain countries, 10 to 15 percent of the market.
The announcement of the 50 billion RMB Qualified Foreign Institutional Investor scheme, launched in Hong Kong in 2011 and expanded to other jurisdictions since 2013 recognizes Luxembourg as one of Europe’s main international financial centers in addition to distributing 67 percent of the world’s UCITS investment funds and the largest investment fund center in the world.