Luxembourg is ready to ride the wave of RMB

(CS) The internationalisation of the Chinese renminbi (RMB) is currently one of the hottest topics in the world of finance, and the new Chinese Luxembourg Chamber of Commerce is ready to connect the pint-sized red lion with the powerhouse Far East dragon.

The Chinese Luxembourg Chamber of Commerce (ChinaLux) officially relaunched earlier this year, following the closure of a previous chamber of the same name. “The old chamber was not up to speed and not in a situation to fulfil the demands of the business world in Luxembourg and China,” explained new president Dirk Dewitte, a partner at Deloitte's tax department.

These demands are steadily rising, Dewitte added, explaining that over 60 percent of overseas direct investment from China to Europe are channelled through the Grand Duchy.

China is preparing to become the world's top economy, taking the crown from the US, by 2020, a development that goes hand in hand with financial reforms and a push to create a global currency. RMB is, for Dewitte, more than just a hype but a long-term process in which China is increasingly looking towards Luxembourg.

“We have a full agenda”

Only recently, China added a third bank to the Luxembourg financial centre and two more are considering such a move, Dewitte revealed. “Luxembourg is well known in China as a hub and a platform,” the ChinaLux president said, adding that the time was now to relaunch the chamber.

“We have all the tools, the knowledge and the experience in Luxembourg to become an alternative hub,” Dewitte commented, from a flexible regulatory environment to great expertise in wealth management and investment funds.

With the 20 founding members split 50-50 between Chinese and Luxembourg-based companies, ChinaLux aims to connect not only banks or investment funds, but also commercial companies, small and medium sized enterprises and industrial players in Luxembourg and China.

“We have a full agenda,” Dewitte laughed. “The internationalisation of RMB is a technical subject and I think it's our responsibility to provide information about the advantages, disadvantages, pitfalls and how to profit from the wave that is coming from China.”

Bridging the cultural gap

Dewitte also spoke about ChinaLux's hopes that the new government will make China a priority. “They don't have a lot of time to lose, they have to be active immediately. We have to show big nations like China that we are capable of finding the right people with the right competences.”

Xavier Bettel's appearance at the opening of the China Construction Bank in Luxembourg in October was a positive first sign, the ChinaLux president added.

At the top of the agenda is not just number crunching, however. “Today, more than 80 percent of deals between Chinese and European firms collapse because of a lack of understanding of cultural differences,” Dewitte said. ChinaLux wants to help bridge the gap.

“We want to offer information, knowledge, connections and relationships with Chinese entrepreneurs and companies,” Dewitte explained. “It's about building trust first, then you can do business.”

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The Chinese Luxembourg Chamber of Commerce is hosting its first event on the internationalisation of RMB on November 13. An official inauguration reception is planned for December.

To find out more about ChinaLux visit china-lux.lu