Luxembourg ‘offers financial gateway to Europe’ for China

By Ma Jingjing Source:Global Times Published: 2017/9/26 21:29:46

Luxembourg for Finance CEO Nicolas Mackel. Photo: Ma Jingjing/GT

Editor's Note:


Global Times reporter Ma Jingjing (GT) interviewed Luxembourg for Finance CEO Nicolas Mackel (Mackel) about the country's role in China's financial presence in Europe, given that some European countries, including Luxembourg, are trying to attract UK-based financial enterprises after Brexit.

GT: What advantages does Luxembourg offer financial institutions, especially from China, compared with other European countries?

Mackel: Luxembourg offers many advantages. Let us take the example of insurance companies. Their business is a long-term one, so they are looking for stability. Although Germany also offers stability, we provide additional advantages, such as a multilingual, multinational environment.

Luxembourg has a very small market, but we do not limit our focus to the domestic market. Companies that set up operations in Luxembourg can cover all the other markets in Europe. The international dimension of Luxembourg, its multilingual population and the efficiency of its small bureaucracy make an enormous difference.

GT: Luxembourg is a leading hub for cross-border yuan business. Why does Luxembourg think highly of the yuan?

Mackel: Luxembourg has developed this activity because we firmly believe in the potential of China, in particular its capital markets. We were proven right first by the IMF's decision to include the yuan in the Special Drawing Rights currency basket in 2015, and we were proven right again by the decision of MSCI to include China stocks in its indexes. For us, [carrying out yuan business] is a long process and we understand the contingencies and constraints. But we firmly believe in the potential of the Chinese market and we see Luxembourg as a platform through which many of these operations can be done.

GT: A video by Luxembourg for Finance titled Luxembourg: China's Bridge to Europe portrays the country as an ideal gateway to the EU for China. Can you elaborate on what makes Luxembourg so ideal?

Mackel: Luxembourg has established an ecosystem of Chinese activity. So far, seven large Chinese banks, such as Bank of China, have chosen to set up their EU hubs in Luxembourg. Our leadership has an open attitude toward Chinese business and yuan-denominated products. They look carefully and try to understand the constraints of investing in a non-convertible currency, and they allow European and international investors to invest through Luxembourg investment funds into the Chinese capital market. It is very much this openness to foreign investment and the international dimension of Luxembourg that make it so ideal.



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