I.Political relations

Chinaestablished diplomatic relations with the Grand Duchy of Luxembourg on the 16thof November 1972with its embassy set up in Luxembourgin June 1978. Luxembourghad its embassy set up in Chinain August 1979. In 1980s, the mutual visits of the two sides mainly include: President Li Xiannian, Vice-premier of the State Council Gu Mu, Member of the State Council and concurrently minister of foreign affairs Huang Hua and Wu Xueqian, Vice-chairman of the Standing Committee of the NPC Liao Hansheng and others. Those who visited Chinafrom Luxembourgmainly include: Grand Duke of Luxembourg Jean and his spouse, Prime minister Gaston Thorn and Pierre Werner, Deputy prime minister and concurrently minister of foreign affairs Colette Flesch and Jacques F. Poos, Speaker of the National Assembly Leo Bollendorff, Le Prince Henri and others.

In 1989, Luxembourg, going along with the European Community, imposed sanction on Chinaand the relations gradually came to recovery and became normal after 1991. Recent years have witnessed frequent mutual visits at high levels of the two countries. The major visits from Chinato Luxembourginclude: Vice-premier and concurrently minister of foreign affairs Qian Qichen in October 1995; Premier Li Peng in February 1998; Vice-chairman of the NPC Jiang Chunyun in June 1998; Vice-chairwoman He Luli in May 2000; Premier Zhu Rongji in July 2000 and Vice-chairman Ye Xuanping in October 2002. Whereas those who visited China from Luxembourginclude: Prime minister Jean-Claude Juncker in February 1996, June 1998, January 1999 and April 2002; Crown Grand Duke Henry in March 1994 and May 1998; Deputy prime minister and concurrently foreign minister Jacques F.Poos in April 1999 and Deputy prime minister and concurrently minister of foreign affairs and foreign trade Lydie Polfer in April 2001, etc.

II. Trade relations and economic-technological cooperation

There is no big volume of trade between the two countries yet it is full of ups and downs. 2002 saw the trade value of the two countries came to US$ 101 million, a rise of 4.5 percent as compared to that of the same period of the previous year, of which the Chinese export accounted for US$ 51.3 million and the import US$ 49.98 million. The major goods China imported from Luxembourg include steel material, mechanic and electric products while the Chinese exports to Luxembourg consist mainly of the light industry products, such as garments, plastic products and toys with most of them being entrepôt trade to other European countries.undefined

Up to December of 2002, the Luxembourginvested projects in Chinacame to 80 in number with the agreed investment coming to US$ 570 million while the actual investment was US$ 106 million. From January to April 2003, the Luxembourginvested projects in Chinareached 7 in all with an agreed investment of USD 11.51 million and the actual investment was US$ 150 million.

Up to the end of 2002, Chinaintroduced in from Luxembourg30 technological projects with a total fund of US$ 82.66 million, mainly centering in the fields of iron and steel and metallurgy. Luxembourgprovided Chinaa mixed investment twice in 1987 and 1989, which was used respectively in the transformation of No.8 Blast Furnace of Anshan Iron and Steel Corporation and the technical renovation of the 3rdIron and Steel Plant of the Ma'anshan Iron and Steel Corporation, the total value coming to US$ 15.25 million.

The Chinese and Luxembourgbanking circles began to establish agency relations and carry on the business in 1973. Bank of China set up a branch office in Luxembourgin 1979 and in 1991 Bank of China(Luxembourg) Co. Ltd. was established. Chinese Industry and Commerce Bank set up its branch office in Luxembourgin June 1999. Besides, Chinaalso established in Luxembourg China Insurance Holding Co. Ltd and the financial company of the China Imports and Exports Corporation.

In 1979, Chinaand Luxembourgsigned an air-transportation agreement. However this left unimplemented due to Luxembourg's cargo transportation business with Taiwan. In September 1997, the two governments of Chinaand Luxembourgreached by way of consultation an understanding on the air-transportation between Luxembourgand Taiwan. In March 1999, Chinaand Luxembourgkicked off air-transportation business with Luxembourgcargo-plane to have its maiden flight to Shanghaiand now it has four flights every week.

Both SES of Luxembourg and China International Credit & Investment Co. are the shareholders of Hong Kong Asia Satellite Holding Co with a respective shareholding ratio of 34.1 and 34.8 percent.

III. Exchanges and cooperation in culture and education

Culture: The two countries signed an agreement of cultural cooperation in 1979. From 1983 to 2000, the two sides signed five plans one after another for the implementation of the exchanges in culture, according to which Chinaever held the Folk Art Show, Hubei Zhou Dynasty Artistic Articles Show in Luxembourg. Chinese acrobatic and national folk music held performances there and sports team also visited Luxembourg. The two sides exhibited mutually paintings, "Exhibition of Outstanding Achievements in Celebration of Centennial Cooperation Between Wuhan& Luxembourg" From September to November 2001, the Luxembourgheld first in Beijingand then in Shanghai the "Luxembourg Painting Show – Collections of the National History and Art Museum of the Grand Duchy of Luxembourg". In April 2002, the Luxembourgside held a Picture Show, the "World Heritage in China" and a special concert "Salutation to China".

Education: Minister of the Ministry of Education Chen Zhili visited Luxembourgin 2000 and the two sides signed an understanding memorandum for cooperation in education. In 2001, Minister of Education Anne Brasseur following the Luxembourg Deputy Prime minister Lydie Polfer came to Chinafor a visit and discussed on the cooperation in education between the two countries. So far the Luxembourgsends every year a student to study in Chinawhile the Chinese side sends students to Luxembourgfor the study on hotel and tourism management. Besides, Chinahas some few students studying there on their own expenses.

IV. Important bilateral agreements