Although the event had not been planned for a long time, as Alfi chairman Jean-Marc Goy pointed out, the timing was perfect: the third plenary session of the 20th Central Committee of the Chinese Communist Party ended on Thursday 18 July in Beijing and its developments are already being presented on 22 July in Luxembourg, in a bid to promote dialogue, mutual understanding and even the fight against the paranoia surrounding China's economic developments. The various speakers invited by the Chinese embassy in Luxembourg, the state media group CMG Europe, the China-Luxembourg Chamber of Commerce, the Chinese Chamber of Commerce in Europe, the Chinese Cultural Centre in Luxembourg and EU Reporter have all tried to convince us that only healthy relations with the Asian giant will be a win-win situation.

A new expression is now at the heart of Chinese storytelling: “high-quality growth,” which already appeared in 2017 to signify the end of the period of all-out growth. Today, it’s all about making innovation the core of growth, coordinating industrial developments, adopting green technology on a massive scale--China is already the biggest supplier of wind and solar technologies--and continuing to lift the population out of poverty (800m people have already been lifted out of poverty, according to China’s ambassador to Luxembourg, Hua Ning), and here’s where it’s most interesting for China’s partners, through reform and openness, to encourage growth in foreign trade and foreign direct investment and bring on board more of the countries involved in the Belt & Road Initiative. More than 300 reforms will have to be carried out by 2029, said the ambassador.

The best thing is “to go and see for yourself,” said Goy, after explaining that he had been to China twenty times, including twice this year. “China is more modern and dynamic than ever. I'm impressed by the latest developments,” he said, before mentioning a market of 678m people for Chinese banking--i.e., more than the population of Europe--and innovation in fintech, boosted by the number of daily transactions.

Paul Schockmel, CEO of IEE, spoke about the rapid development of the automotive sector in China, its transition to electrification, and the development of the Luxembourg company since a Chinese shareholder, SAIC, acquired a stake in it 11 years ago. To remain competitive, IEE will increasingly turn to the Chinese market for its components, products and production, which will also enable it to reduce its environmental footprint. “Technology is important,” said Schockmel during the short Q&A session, “but China has another advantage: consumers who are very open to adopting new products.”

At the moment, that’s not quite the case. On Monday morning, before the start of the event, we learned that the Chinese Central Bank had cut two benchmark interest rates to stimulate growth after a number of disappointing economic indicators, rates that were already at their lowest levels ever: the one-year LPR (loan prime rate), which is the benchmark for the most advantageous rates that banks can offer to businesses and households (which was already lowered in August 2023), has been cut from 3.45% to 3.35%; the five-year rate, the benchmark for mortgage loans, has been lowered from 3.95% to 3.85%. In addition to “weak” consumption, China is in the grip of a major property crisis and youth unemployment remains very high.

The Chinese ambassador acknowledged this, urging them to take a long-term view. The diplomat suggested that Europeans should look at Chinese technologies to reduce their energy costs. He also referred to new types of investment in Europe (Spain, Hungary, Italy, Luxembourg, France), which he said were no longer about buying luxury hotels, football clubs or wine châteaux.

When asked by David Arendt about the next financial institution to join Luxembourg after the seven largest Chinese banks, a payment service such as Ping Pong and China’s leading insurer China Taiping (which obtained its licence from the Insurance Commission in May), the ambassador stressed Luxembourg’s “predictability,” a stable and neutral ecosystem. “If they feel confident, they’ll come. If not, they won’t come,” he said, adding that Luxembourg is also a hub for investment in China.

Goy added that after his last week-long visit--in the company of representatives of the Luxembourg Bankers’ Association (ABBL), the insurance association Aca and Luxembourg for Finance--opportunities were being examined. Among the topics discussed were sustainable finance, stock exchanges, fintech and innovation, European long-term investment funds (Eltif) and certain industries. “There are a lot of investment opportunities in China,” said Goy. “We know that. Our members at Alfi, ABBL, Aca and Luxembourg for Finance are studying them. We have emphasised to our contacts the variety of our investment vehicles and structures. We have a real toolbox for investors.”

Luxembourg, a first mover, continues to be a first mover in its dialogue with China. What remains to be done is to spread the word at European level, where, for example, the taxes imposed on Chinese carmakers--up to 38%--are not going down well. And the former American president, Donald Trump, has already promised 60% additional taxes if he is elected. Let’s talk, replies China. That's what all these fine people went to do during the last part of the event.

This article was originally published in French.