Pierre Gramegna speaking at a Luxembourg for Finance press conference on Tuesday
Photo: Christophe Olinger
Finance: Bank of Communications is the latest major Chinese bank set to launch operations in the Grand Duchy, Luxembourg’s finance minister has reported.
A sixth major Chinese bank plans to open up shop in the Grand Duchy. Bank of Communications will begin its local operations by the end of the year, Pierre Gramegna, Luxembourg’s finance minister, said on Tuesday.
Bank of Communications is China’s fifth largest bank, Gramegna noted during a press conference organised by Luxembourg for Finance, a government-backed promotion agency. This signals that China considers the Grand Duchy’s financial centre an important hub, he stated.
Earlier this year, Reuters news agency reported that the bank would invest €100 million to establish a wholly owned subsidiary in Luxembourg.
Asked during the press conference when China will designate a renminbi (RMB) clearing bank in Europe, Gramegna responded that: “the decision is in the hands of the Chinese authorities. It’s an internal decision”.
In June the central banks of Luxembourg and China signed a memorandum of understanding on clearing RMB transactions, paving the way for direct trading of China’s currency and the euro in the Grand Duchy. However China’s government did not indicate when specific banks would be granted authorisation.
Luxembourg is competing with London, Paris and Frankfurt to become the leading offshore RMB trading hub in Europe. The Grand Duchy is already one of the largest EU financial centres handling RMB-denominated bank loans, investment funds, and bond issuance and trading.
Separately Gramegna met with Jin Liqun, China’s deputy finance minister, in Luxembourg on Tuesday. They discussed strengthening bilateral relations in the financial field, the Grand Duchy’s finance ministry said in a statement.
Agricultural Bank of Chinaand China Merchants Bank--as well as Alipay, the electronic payment system that is sometimes called “China’s PayPal”--also are launching units in the Grand Duchy this year.
China Construction Bank inaugurated its EU hub on boulevard Royal last October, Industrial and Commercial Bank of China arrived three years ago, and Bank of China starting its Luxembourg undertaking in 1979.