China Construction Bank, the world's second largest by market value, will soon open a subsidiary and a branch in the Grand Duchy of Luxembourg.
The government of Luxembourg said the decision followed talks between CCB President Wang Hongzhang, Luxembourg Prime Minister Jean-Claude Juncker and Finance Minister Luc Frieden.
It said the Chinese bank had decided to open in Luxembourg due to the country's stable economic environment and the great quality of the regulatory framework and financial services.
Two other major Chinese banks also operate in Luxembourg: the Industrial and Commercial Bank of China which opened its main European office there in January 2011 and the Bank of China, present since 1979. This means that three of the Big Four Chinese state-owned banks are doing business in Luxembourg. Only the Agricultural Bank of China is not present in Luxembourg.
Within the next five years, the Chinese government is expected to make more breakthroughs in reforms including interest rate liberalization and bond market development, according to Chinese banking industry sources.
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