The paradox of the China-Luxembourg “idyll”
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DiplomacyThe paradox of the China-Luxembourg “idyll”
LUXEMBOURG/BEIJING – Luxembourg and China have an ambiguous connection between strong economic ties and chilling Sino-European relations. Explanations.
50 years of diplomatic relations and a bond that must continue. In mid-November, Grand Duke Henri spoke with Chinese President Xi Jinping and greeted “fruitful bilateral cooperation”, while Prime Minister Xavier Bettel paved the way for “new areas of collaboration”.
Requested by The essential, the non-profit organization ChinaLux, active in promoting trade between the two countries, can only prosper. She insists on the “very strong links” between the Middle Kingdom and the Grand Duchy. Economic above all with the major interest caused by the Luxembourg financial centre, a world first concerning investment funds. No less than seven Chinese banks have established themselves in Luxembourg, the last China Everbright Bank in 2016.
No new Chinese banks approaching
“It’s the Royal Boulevard of China (…) The Luxembourg market is a hub for Chinese banking subsidiaries in Europe,” explain Zhujun Xie, president of the association, and Jacques Bortuzzo, vice-president. A dynamic which, however, came to a halt with the Covid crisis. According to ChinaLux, no other Chinese bank has planned to establish itself in the Grand Duchy in the coming years.
A retreat of Chinese interests in the heart of Europe? On the contrary, China is now focusing on new technologies, green energies, and of course, strategic sectors. In addition to BIL, now under the Chinese flag, Chinese shareholders have invested 35% in the capital of the freight company Cargolux or even in the energy supplier Encevo (24%).
Interests that apply to the question, and which act on the paradox affecting relations that have become icy with Europe. However, Luxembourg is one of the spearheads of the European Union, does not vigorously defend its positions at the international level. “China opened up before referring. She has become aggressive,” summarizes Luxembourg MEP Isabel Wiseler-Lima.
The elected CSV was sanctioned last year by China because of her membership of the human rights sub-committee of the European Parliament, as was Charles Goerens (DP), after the EU itself even sanctioned Chinese officials for their involvement in human rights violations against the Uyghur minority.
“It does not change my view of China. We must overcome this situation and move the lines. Discussing the climate, health and security with such an important country is essential (…) Relations have become strained, but we need to have a proactive policy”, demonstrated the MEP in an interview granted to The essentialalso pointing to the potential usefulness of China in the settlement of the Russian-Ukrainian conflict.
Luxembourg and its “acceptable pressures”
In his foreign policy statement, the head of Luxembourg diplomacy Jean Asselborn showed skill, defining China as “an essential player” with whom there are “real disagreements”. “Luxembourg has decided to deal with all the subjects within the framework of a critical and constructive dialogue”, he summed up.
A nuanced position that seems to suit the Chinese authorities. “Luxembourg’s ‘pressure’ is acceptable. Business is always important and the Grand Duchy is always ready to discuss”, welcome the officials of ChinaLux. Even if it means maintaining a certain ambiguity…