Luxembourg and China strengthen collaboration and commit to working closer together in climate finance
Luxembourg’s Minister of Finance, Pierre Gramegna, was in China for high-level bilateral meetings this week, including with Minister of Finance Xiao Jie and Governor Zhou Xiaochuan of the PBOC. The Minister headed a delegation of more than 70 key decision-makers from Luxembourg’s financial services industry.
This visit demonstrated the commitment of both countries to boost co-operation, in particular in green finance and FinTech.
In the context of the yearly road show, Luxembourg for Finance organised conferences in Beijing and in Shanghai bringing together financial services professionals to discuss recent developments and trends in the investment sphere between China and Europe. Several cooperation agreements were signed, including an MoU between the bankers’ associations, ABBL and China Banking Association, to strengthen the international exchange and co-operation in the banking industry as well as between the Luxembourg House of Financial Technologies (LHoFT) and Tsinghua University Science Park Ventures to promote Fintech investments between China and Europe.
Furthermore, China UnionPay, the Chinese leader in card payments, decided to establish an operation in Luxembourg through its subsidiary China UnionPay Merchant Services (China UMS) to develop its activities on the European market. Ant Financial, the online finance arm of Chinese e-commerce giant Alibaba and mother company of Alipay, will participate in Infrachain, a blockchain infrastructure initiative of which the Luxembourg government is one of the promoters.
In the area of green finance, the Luxembourg Stock Exchange (LuxSE) and Shanghai Stock Exchange (SSE) expanded their co-operation by signing an addendum to an existing Memorandum of Understanding (MoU) to launch the first ‘Green Bond Channel’ between China and Luxembourg. This extension will enable SSE-listed green bonds to be displayed on Luxembourg Green Exchange. China's $9 trillion bond market is the second largest in the world, but only 2% of Chinese bonds are foreign-owned. This new "Green Bond Channel" will significantly help to connect issuers and international investors outside China and provide complete information to them.
Earlier this week, during the China-Luxembourg Green Finance Innovation Forum held at the Central University of Finance and Economics (CUFE) in Beijing, the International Institute of Green Finance, CUFE, Luxembourg Stock Exchange and China Securities Index jointly launched the "CSI 300 Green Leading Stock Index". The index will be an important yardstick of value for investors to appreciate the performance of green Chinese listed companies.
Moreover, ICBC Luxembourg and the LuxSE jointly announced the bank’s inaugural issue of green bonds to be listed on Luxembourg LGX. Not only is ICBC the first Chinese bank whose “Green Bond Framework” is aligned with both international and Chinese green standards, it is also the first Chinese bank to receive a “Dark Green” Second Opinion by the Center for International Climate and Environmental Research. The proceeds of the green bonds will be used to support China’s Belt and Road Initiative (BRI) and refinance eligible green projects in domestic provinces and foreign countries key to the Initiative.