China's Financial Networks in Luxembourg (China-Lux)
This PhD project aims at analysing how the globalisation of Luxembourg-based Chinese financial activity is organised, and what the economic and political implications of the newly localising Chinese banks in Luxembourg for the European financial landscape will be. This is important for at least two major reasons. First, China is in the midst of major structural economic and political reform. Its foreign policy toward Europe is characterised by expanding foreign direct investments (FDI), including numerous strategic firm acquisitions, the development of the ‘One Belt, One Road’ (OBOR) infrastructure programme to link China with Europe, bolstered by China’s internationalisation strategy of its currency RMB. Luxembourg is a key strategic node of the securities industry and matches China’s need for a suitable hub for its strategic foreign financial activity. Luxembourg is the European leader for the RMB QFII scheme, for listing Chinese bonds and for domiciling large Chinese investment funds. Second, in 2015, 40% of Chinese FDI to Europe were realised via Luxembourg. While China is committed to international economic expansion, Europe faces several matters that threaten its economic stability. The European banking systems have been in considerable flux, and the nature of banks and banking has been changing rapidly, with large Chinese State-owned banks challenging the market-based European banking system profoundly. This PhD project follows a qualitative research design and employs, e.g. methods of expert interviews and techniques of Social Network Analysis. The well-established concept of Global Production Networks (GPN) is a highly useful theoretical starting point for this research as investigating Chinese FDI within the OBOR framework that links China with Europe from a newly established European ‘financial hub’ is only just developing. I seek to advance research in this interdisciplinary field, and to progress the theoretical GPN foundations for financial geography and political economy alike.