Luxembourg’s finance minister is beating a path to China in a bid to deepen ties with the world’s second-biggest economy, as European nations battle for a share of business with the country.

Luxembourg’s finance minister is beating a path to China in a bid to deepen ties with the world’s second-biggest economy, as European nations battle for a share of business with the country.

The delegation announcement comes a day after associations representing the Luxembourg and Chinese asset management sectors said they had inked a memorandum of understanding on forging closer ties. The banking sectors in China and Switzerland have also taken a similar step in recent days. And the UK recently announced moves to make London a prime centre for transacting renminbi-denominated business.

Luxembourg’s finance minister, Pierre Gramegna, is leading a group of 70 executives from the financial and related sectors to China. The country has signed a MoU with the People's Bank of China setting the framework for a future designation of a renminbi clearing bank in Luxembourg.

He also announced that China Merchants Bank has decided to start the process of setting up in Luxembourg. The European jurisdiction already hosts Bank of China, ICBC and China Construction Bank.

The minister also attended the signing ceremony of a MoU between the Asset Management Association of China and Luxembourg’s Investment Fund Association, as previously reported.

Luxembourg says it holds the largest pool of RMB deposits in Europe (RMB79.4 billion by the end of the first quarter of 2014 and a 24 per cent increase compared with the 2013 Q4). It also has the largest securities hub in Europe (RMB 635 billion by the end of 2013), and the largest RMB loan portfolio in Europe (RMB 73 billion by the end of the first quarter 2014, showing an increase of 36 per cent)

The country says it is also host to (RMB261.8 billion in funds, as at the end of the first quarter 2014).