Complementarity of financial centres is key in renminbi internationalisation
The first major European conference on the internationalisation of the renminbi has been hosted in Luxembourg on February 26. The Luxembourg Renminbi Forum gathered around 300 participants from all over the world.
Panelists from Mainland China, Hong Kong, London, Paris, Frankfurt and Luxembourg elaborated on a number of aspects around the Chinese yuan. The conference started off with a speech by Luxembourg Minister of Finance Pierre Gramegna, who highlighted the development of the RMB from a trade to an investment currency and Luxembourg’s role in this development. Luxembourg is the main recipient of Chinese Foreign Direct Investment stock into Europe and the largest European international RMB centre by volumes for a number of activities. The Minister mentioned that the presence of the European headquarters of three of the largest Chinese banks in Luxembourg, Bank of China, ICBC and China Construction Bank is an impressive sign of China's trust in Luxembourg’s financial centre.
Renowned experts discussing China’s economic outlook and the impact of expected financial reforms on trade and investment flows between China and Europe agreed that despite the renminbi’s recent downfall against the US dollar, it would in the medium-term remain a stable investment currency.
A main topic of the forum was the role of European financial centres in the internationalisation of the renminbi. The common message was found quickly:
In order to make the renminbi a truly global currency, European financial centres will specialise.
Didier Mouget, Managing Partner at PwC Luxembourg articulated what was in the looming, namely that every financial centre can play out its strengths with regard to the circulation of the Chinese currency: “I don’t think there is a real competition between financial centres, ultimately clients and the market will decide. The market is telling us that European financial centres are going to specialise. Luxembourg obviously is the financial centre in Europe for wealth management services and investment funds and intends to play a significant role based on its existing strategy. Our aim is to position ourselves not in competition but in complementarity to other financial centres.”