News - 17.09.2018

Alipay and China UMS to set up EU hub in Luxembourg

  • Renminbi

At the end of a week-long mission led by Minister of Finance Pierre Gramegna to Beijing, Hangzhou and Shanghai, China’s Ant Financial confirmed the decision of its payment arm – Alipay – to set up its EU hub in Luxembourg.

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This announcement comes after China UMS, another major Chinese Fintech company, also announced its choice of Luxembourg. Already the European home to leading US and Japanese Fintech and payment firms, these latest arrivals from China will further strengthen Luxembourg’s role as a pan-European Fintech hub providing access to the world’s largest single market.

During his visit the Luxembourg Minister held meetings with his Chinese counterpart, Minister of Finance Liu Kun and PBOC Governor Yi Gang to discuss the global macro-economic situation as well as developments in the financial services industry in Europe and China, in particular trends in sustainable finance and digitalisation of financial services. He further met Jin Liqun, Chaiman of the AIIB, to discuss bilateral cooperation as well as next year’s annual meetings which will be held in Luxembourg in July 2019.

The ministerial delegation, including high ranking officials and industry representatives, also held meetings with major financial institutions to discuss how Luxembourg can serve Chinese players looking to expand their operations in Europe.

Luxembourg for Finance organised conferences in Beijing and in Shanghai to discuss China’s Belt and Road Initiative, Europe’s investment landscape and latest developments in China related investment flows with the local finance professionals.

During the visit, several cooperation agreements have been signed, including an MoU between the Luxembourg Stock Exchange (LuxSE) and China Central Depository & Clearing (CCDC) to simultaneously display prices of CCDC’s three domestic green bond indices to facilitate greater transparency and enhance access to information related to Chinese domestic green bonds for investors in international markets. The aim of the cooperation is to contribute to measuring the rapid growth of China’s green finance market and engage not only local, but also international investors, as they gain access to information on the market indicators.

The Luxembourg Stock Exchange also signed a tri-party agreement with the Shanghai Stock Exchange and Bank of China to further develop the Green Bond Channel project. Bank of China will act as the primary partner in offering related services to investors using the Green Bond Channel. The Green Bond Channel is a practical solution to help green finance go mainstream and engage not only public, but also private investors. Through the cooperation, LuxSE provides relevant information in English about Chinese green bonds to offshore investors.

Moreover, the LHoFT (Luxembourg House of Financial Technology) signed an MoU with DeepBlue Technology, a Chinese pioneer in the technological field of Artificial Intelligence. Since 2014, the company has been focusing on developing the newest retail and payment technology bringing forth a new era of retailing. DeepBlue Technology will establish its EU hub in Luxembourg to serve the EU market and develop its research and innovation activities in collaboration with the Interdisciplinary Center for Reliability and Trust of the Luxembourg University.

Luxembourg today hosts the EU hubs of 7 large Chinese banks as well as two banks, which are controlled by Chinese shareholders. With 28,2% of global investment funds investing in China, Luxembourg has a leading position worldwide ahead of other large financial centers. Earlier this year, the Luxembourg Stock Exchange overtook Hong Kong to gain a 24% market share in Dim Sum Bond listings and thus became the leading Dim Sum listing venue.