Luxembourg has historically attracted foreign financial service firms looking to enter the European market. It's political and economic stability, as well as friendly regulations has made it the first choice of many businesses.
Now Chinese FinTech startup, Pingpong, has announced that over the coming years, it will invest €100 million ($113 million) in the country.
We are actively following the country’s Belt and Road Initiative to empower Chinese businesses through innovation in the cross-border ecosystem. This will help companies complete their digital transformation and be more competitive abroad.Luo Yonglong, partner at Pingpong
As part of its processes, it also clears local regulatory hurdles in order to receive payments. To this end, it will be applying for a banking licence in Luxembourg.
However, Luxembourg is just a stepping stone. Luo Yonglong, a partner at Pingpong, said that within three years, the company’s cumulative investment on the continent will exceed €6.39 billion or $7.21 billion.
China is slowly but surely strengthening its presence across the globe. While its capital is much welcomed, governments are becoming skeptical of the economic dependency their capital draws over time.
With Pingpong's operations setting up in Europe, the market will see increased e-commerce purchases being made from Chinese exporters. While this will give Amazon serious competition, it would affect the local SME businesses a lot more.
Will European governments keep check on Chinese capital influence on the continent's economy?