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Foreign Exchange

Big plans in Little China: Luxembourg steals a march in the race to become Europe’s renminbi centre

Forget about the Belgian dentists and German doctors of old. Today, Luxembourg’s streets are filling with Chinese bankers. They see the Grand Duchy as a hub for their European operations – not least for trading and settlement of the renminbi. Are London, Frankfurt and Paris in danger of being left behind?

Industrial and Commercial Bank of China’s European headquarters dominate a picture-postcard location in the heart of Luxembourg City, the sleepy, tree-enveloped capital of the tiny yet financially powerful country.

The towering building of the world’s largest bank looks out over the Adolphe Bridge, a national symbol that spans the Pétrusse valley, connecting Boulevard Royal, in the area of Ville Haute, to Avenue de la Liberté, in Gare.

It is a prime piece of real estate once owned by HSBC that says as much about ICBC’s remarkable rise on the world banking stage as it does about the importance ICBC associates with its banking presence in Luxembourg.

ICBC is not alone. The European headquarters of Bank of China, which first opened a branch in Luxembourg in 1979, are located just around the corner from ICBC on Boulevard Prince Henri. And China Construction Bank will soon open its doors for business in Luxembourg after receiving its banking licence.

With China’s three largest banks basing their European operations there, and more sure to follow, Luxembourg is swiftly evolving into the preferred outpost for Chinese investment and banking expansion across the European continent.

Hand in hand with this is Luxembourg’s quiet yet equally rapid emergence as a leading western financial hub for all things renminbi, a development that suggests it is stealing a march on such rivals as London, Paris and Frankfurt – all of which have trumpeted their ambitions in the currency.

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