A man passes by a wealth management center of China Merchants Bank in Nanjing, capital of Jiangsu province. The bank has been approved to set up a branch in Luxembourg. ZHEN HUAI/CHINA DAILY

China Merchants Bank Co Ltd has received permission from the Chinese authorities to set up a branch and a subsidiary in Luxembourg, making it the fourth Chinese bank to have a presence in the Grand Duchy, said Pierre Gramegna, Luxembourg's minister of finance.

Other Chinese banks are also interested in entering the country, said Gramegna at a forum held in Beijing on Tuesday that aimed to promote Luxembourg as China's financial hub in Europe.

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Chinese banks have chosen Luxembourg as a central platform in Europe, he said. From there, they manage a European network and help Chinese clients in their European trade deals and investments.

Bank of China Ltd opened a representative office in Luxembourg in 1979. It was later joined by Industrial & Commercial Bank of China Ltd and China Construction Bank Corp.

"The reason Chinese banks chose Luxembourg was to a large extent related to the acceptance by the Luxembourg regulator of China's supervision of its own banking industry as being equivalent to our own system. This allowed Chinese banks to set up branches in Luxembourg and gave them an important liquidity advantage," Gramegna said.

"Other European countries may not have been as welcoming," he said.

China's largest State-owned banks moved big chunks of their European business to Luxembourg as they sought to escape tougher regulations in the City of London, the Financial Times reported in 2012.

In a letter to the United Kingdom Treasury at that time, the Chinese banks strongly objected to uneven regulations and "rigorously demanding" liquidity requirements that forced them to transfer business and even the management of their European operations from London to Luxembourg, which is known for its light regulatory regime.