Lux­em­bourg woos Chi­nese in­vestors

EU’s 2nd-largest fi­nan­cial hub hopes to at­tract more fi­nan­cial in­sti­tu­tions

China Daily (Hong Kong) - - BUSINESS - By CHEN JIA and ZHUANG QIANGE Con­tact the writ­ers at chen­[email protected]­

Lux­em­bourg, the sec­ond­largest fi­nan­cial hub of the Euro­pean Union, wel­comes Chi­nese in­vestors and ex­pects China to open up its mar­kets fur­ther and carry out more eco­nomic re­forms, its fi­nance min­is­ter said.

“We’re look­ing for­ward to see­ing how the fi­nan­cial mar­ket is go­ing to open up more in China in the near fu­ture, and very ea­ger to hear what de­ci­sions are go­ing to be an­nounced after the 19th Na­tional Congress of the Com­mu­nist Party of China,” said Pierre Gramegna in an ex­clu­sive in­ter­view.

“Europe and China are re­ally to­day on the same line as they to­gether pro­mote bi­lat­eral trade and in­vest­ment, which will strengthen the re­la­tion­ship be­tween the two sides,” he said.

With the UK leav­ing the round ta­ble of the EU, Lux­em­bourg, which holds the sec­ond place after Lon­don as a fi­nan­cial cen­ter in Europe, is at­tract­ing more Chi­nese fi­nan­cial in­sti­tu­tions to con­duct their busi­ness, and es­tab­lish branches or sub­sidiaries in its ter­ri­tory.

“We should not over-dra­ma­tize the im­pact of Brexit -- (but) many Chi­nese banks have also found so­lu­tions in Lux­em­bourg (which they see) as an­other en­trance to the EU sin­gle mar­ket,” Gramegna said.

Seven Chi­nese banks have opened sub­sidiaries or branches in Lux­em­bourg. They in­clude Bank of China, In­dus­trial and Commercial Bank of China and China Con­struc­tion Bank.

“Lux­em­bourg now has 50 bil­lion yuan ($7.62 bil­lion) of RMB Qual­i­fied For­eign In­sti­tu­tional In­vestors (RQFII),” Gramegna said. “This will con­tinue to pro­mote the ren­minbi’s in­ter­na­tion­al­iza­tion by in­creas­ing its us­age in trade and in­vest­ment in Lux­em­bourg.”

So far, Lux­em­bourg has been the sec­ond-largest global des­ti­na­tion for in­vest­ment funds in­vest­ing in China. About 65 per­cent of all Euro­pean in­vest­ment funds in­vest­ing in the Chi­nese main­land are domi­ciled in Lux­em­bourg, ac­cord­ing to data from Lux­em­bourg for Fi­nance, a pub­lic-pri­vate part­ner­ship be­tween the Lux­em­bourg gov­ern­ment and the Lux­em­bourg Fi­nan­cial In­dus­try Fed­er­a­tion.

The Com­mis­sion de Sur­veil­lance du Secteur Fi­nancier or CSSF, the coun­try’s fi­nan­cial ser­vice reg­u­la­tor, has also paved the way for Euro­pean funds to ac­cess the Chi­nese in­ter­bank bond mar­ket and the A-share mar­ket.

Funds domi­ciled in the coun­try in­vested 1.42 tril­lion eu­ros ($1.67 tril­lion) in eu­roarea cor­po­ra­tions and gov­ern­ments in 2016, with a fur­ther 358 bil­lion eu­ros in­vested in other EU mem­ber-states, ac­cord­ing to United Na­tions Con­fer­ence on Trade and De­vel­op­ment.

Pierre Gramegna

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