Abstract

(with Sabine Dörry (LISER))

This paper investigates processes of clustering of Chinese state-owned banks in Luxembourg’s financial centre over time. It focuses on banks as both economic and political actors, and positions this research within the discourse of the global financial networks approach and Chinese state-led activities. We argue that both countries, Luxembourg and China, have developed strong strategic links over the past years, for example, Luxembourg has developed attractive business conditions for the financial activities that Chinese banks seek to pursue within the frameworks of the Chinese State’s wider geo-political and geo-economic agenda. Yet, these newly forged links via Chinese banks will be changing Luxembourg’s landscape as a financial centre of the future. Hence, we conceptualise the Chinese banks (and their network) in Luxembourg as ‘agents of change’ and investigate empirically, why (and how) Chinese banks have clustered in such number and speed specifically in Luxembourg as compared to other IFCs. We position this research among the literatures of the GFNs approach and evolutionary economic geography on the one hand, and of comparative political economy on the other. The former – predominantly geographical – approaches allow for sharpening our understanding of the Chinese banks as (strategic) economic agents that shape distinct regional economies (firm-cluster relationships), that is, Luxembourg’s financial centre. The latter – political economy – approach offers in-depth insights into the two different institutional contexts of China and Luxembourg, but also blends this view with the perception of banks as political agents that act as their ‘boundary spanners’ to help promoting China’s larger geo-political and geo-economical ambitions.