China's financial spaces in Europe: Bank networks, investments, and currency

Despite the vast research on China’s external economic expansion, little is known about the spatial organisation and operations of Chinese commercial and development banks that enable such expansion. This thesis by publications sheds new light on the physical presence, organisation and agency of Chinese banks in Europe. It analyses the capability of Chinese banks to create new financial spaces. I start with the assumption that socioeconomic interactions, which I ascribe to the combinations of network-place and structure-agency, construct (financial) space. I identify Luxembourg as a key place of the spatial organisation of Chinese banks in Europe and detect Chinese banks as key players in organising the mechanisms that enable China’s economic expansion into Europe. To understand the implications of Chinese banks’ presence and operations in Europe, I address three intertwined overarching questions: what are Chinese banks doing in Europe? How are they spatially organised? Are they reshaping European financial spaces? To answer, I designed interdisciplinary qualitative research based on expert interviews and desk research. I selected three dimensions for Chinese financial activity in Europe: bank networks, currency and investments, which I analyse in four chapters/publications. The first two chapters analyse the geoeconomics of Chinese bank networks’ expansion and its spatial organisation that enables mergers and acquisitions in Europe respectively. Chapter 3 analyses how Chinese development banks make use of Luxembourg’s investment fund industry to invest in (energy) infrastructures and private equity in Central and Eastern European countries. Chapter 4 analyses the investment role of money as a neglected dimension to understand renminbi internationalisation. This chapter highlights the roles of Luxembourg and Western banks as key for investments into China’s domestic financial markets, and the role of China’s state in governing the inflow of such investments. Findings from the four chapters show how Chinese financial spaces in Europe are co-constituted by both Chinese and European actors. I find that Chinese banks have established a wide set of networks across Europe while their activity is still limited. This suggests that Chinese bank networks are still in an embryonic stage although they are preparing to widen their activities in the (near) future. This strengthens Luxembourg’s positionality as a key financial hub connecting China to Europe. Chinese banks’ attractiveness as future gatekeepers to the Chinese domestic financial markets suggests that they will expand their activities in Europe despite current geopolitical frictions between China and the West. Beyond contributing to the growing literature on China in Europe, this thesis contributes to the advancement of the sub-disciplines of economic and financial geography by conceptualising banks as key agents of financial space creation and shapers of global financial networks.