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      Luxembourg’s market is the world

      Luxembourg’s market is the world

      Back in Luxembourg from the LFF mission to China, Minister of Finance Luc Frieden’s conclusions on the visit were positive. In the course of a marathon programme, part of which coincided with the Asian Financial Forum in Hong Kong, he took part in a policy dialogue with European colleagues, where they discussed the future of the financial world.

      Minister Frieden also had meetings with the five major Chinese banks, two of which - Bank of China and ICBC - have already established their European hub in Luxembourg. A third, China Construction Bank, last year announced the opening of a branch in the Grand Duchy in the near future.

      “The aim of my visit was to promote Luxembourg as an entrance door to the European market”, the Minister said during a press conference. “Luxembourg remains open for foreign capital. Luxembourg’s market is the world”. He said that during his meetings with the Chinese Minister of Finance Xie Xueren and the presidents of the regulators of the banking and the fund industry, certain concerns concerning the future of the Eurozone could not be denied. However, awareness of the advantages of the Luxembourg financial centre, the result of a long-standing relationship between the two countries, outweighed doubts.

      “What they very much appreciate here in Luxembourg are the short paths of decision making. We have to be careful not to slip into bureaucracy, because in many other countries, this is noticed as a disadvantage.” 

      The positioning of Luxembourg as an offshore RMB hub was one of the strong messages Minister Frieden wanted to communicate. With 20 bn RMB, Luxembourg already has the biggest pool of Remninbi deposits in the Eurozone. Loans for an amount of 30 bn RMB are currently structured via Luxembourg, while the local fund industry manages 200 bn of RMB assets.

      “This is a good base to build on”, the Minister added. Chinese players are looking for places other than London for the offshore RMB business”. Chinese regulators have set the ball rolling by announcing the possibility for Chinese investors to invest higher amounts of money abroad than has been the case so far. The new policy will also offer the Luxembourg fund industry an opportunity to invest more in China. Luxembourg is already the biggest fund distributor in Hong Kong. EA