As Luxembourg continues to grow as an RMB and e-payments hub in Europe, the Minister of Finance Mr. Pierre Gramegna announced on a recent visit to Shanghai that Alipay, one of the major online payment platforms in China, will establish its European entity in the Grand Duchy of Luxembourg.
Mr. Gramegna, who led a delegation of 70 top executives from the financial and related sectors to China said: “We are delighted to welcome Alipay to Luxembourg where it will join other leading innovative e-payment companies such as Paypal and Amazon Payments. This is a strong reflection of Luxembourg’s position as a modern, dynamic banking hub which provides an environment for e-commerce companies to thrive. We have a long, trusted history as an international financial centre in Europe and today we are a leading centre for the RMB outside China. We are well-placed to support this currency on its internationalization journey and we are looking forward to further developing our historical role in the financial sphere as a bridge between China and Europe.”
Luxembourg Deputy Prime Minister and Minister of the Economy Etienne Schneider, who visited Alipay headquarters in Hangzhou in December 2013 together with HRH the Crown Prince of Luxembourg, stressed the growing interest of Chinese companies in Luxembourg: “Led by the main banks such as Bank of China and ICBC, an increasing number of innovative companies are choosing Luxembourg as their base to enter the European market.” Prime Minister Xavier Bettel added: “The investments in ICT infrastructures made by the Government over the last decade give us a cutting edge as a hub for ICT companies and we are pleased to welcome Alipay into our growing family of Luxembourg-based e-commerce specialists.”
Minister Gramegna also announced during a speech in Shanghai that the Agricultural Bank of China (ABC) is in the process of setting up its EU headquarters in Luxembourg. During a meeting with the leadership of ABC the progress to use Luxembourg as their hub was discussed. He explained “Five of the six largest Chinese banks have chosen Luxembourg as their hub in Europe confirming its attractiveness as an entry gate into the European Union’s Single Market. With these new financial players from China, Luxembourg will also further increase its leadership as a European Renminbi hub.”
During the visit, Luxembourg’s Central Bank and PBoC signed a Memorandum of Understanding setting the framework for a future designation of a Renminbi clearing bank in Luxembourg. In Beijing, the Finance Minister participated in the signing ceremony of a Memorandum of Understanding between the Asset Management Association of China (AMAC) and Luxembourg’s Investment Fund Association (ALFI) and announced the decision of China Merchants Bank to set up in Luxembourg. It will join the Bank of China, ICBC and China Construction Bank.
In just a short time, the RMB has become one of the world’s most in-demand currencies and the internationalisation of the Chinese yuan has created the need for a convenient hub in Europe. With its historical roots in international finance, Luxembourg has been at the forefront of this development. Luxembourg's Stock Exchange was the very first Stock Exchange outside Greater China to list a bond denominated in Renminbi. That was in May 2011 and since then 45 multinational companies and sovereigns have used the Luxembourg Stock Exchange to fulfill their Renminbi liquidity needs.