Luxembourg's challenge to London over China's yuan
The Chinese currency, the yuan, has fallen by almost 2% over the past fortnight against the US dollar.
This is the largest sustained drop since China's central bank, the People's Bank of China (PBOC), decided in 2005 to slowly turn the yuan into a freely floating currency.
The yuan, which is also known as the renminbi, is not really available outside mainland China.
You can't walk into a bureau de change in London or Lusaka and swap your pounds or kwacha for yuan notes, nor can you open a yuan account outside China - yet.
But this is changing. China is allowing more and more places to trade in its very tightly controlled currency. Hong Kong, London and Singapore have each been given quotas allowing banks based in these cities to trade in the currency.
Soon, big banks managing giant pension funds will be able to invest directly in China using yuan. And as the Chinese loosen their grip on their own currency, billions of dollars in transaction fees could be earned by banks.
No free pass
In fact, so potentially lucrative is it that many European governments are bending over backwards to roll out the red carpet for this potential Chinese currency business.
London, which is already the financial centre in Europe, thinks that it is best placed to be the Western hub for all Chinese offshore yuan business.
The scale of the City of London and the skilled financial staff already here means it would be an obvious choice for such offshore trades.
The Bank of England, urged on by the Chancellor, George Osborne, has allowed Chinese banks to set up branches in London with far less regulatory control than has been required by other foreign banks - much to the annoyance of some US banks.
But London is not going to get a free pass. Frankfurt, Paris and especially Luxembourg all want a large slice of the growing Chinese currency pie.
Luxembourg does not not have much physical trade with China, unlike Germany which is China's second largest trading partner.
However, the three largest Chinese banks - ICBC, Bank of China and China Construction Bank - have already established their European headquarters in this tiny principality, sandwiched between France and Germany.
Because these giant Chinese banks, which are among the top 10 largest banks in the world, already have a large presence here, it makes it less likely they will move major operations to London as the yuan becomes more freely floating.
And their use of the Chinese currency is soaring. In the space of two years yuan transactions already now account for 35% of ICBC Europe's profits.
"Having been here for almost 16 years, we find Luxembourg offers a very attractive legal and business framework, with social and political stability," says Gao Ming, chairman of ICBC Europe, which runs a network of operations including in Frankfurt and Brussels from its Luxembourg HQ.
"And as you know, Luxembourg is one of the very few European countries with a triple-A rating," she says.
Heart of Europe
For his part, Luxembourg's Finance Minister Pierre Gremagna says his country's presence in the eurozone and the EU's single market is key, "there's no doubt about that".
"The Chinese have mentioned the seamless way of doing business here as a key advantage," he says.
He agrees that Luxembourg is the financial equivalent of Amsterdam's Schiphol airport - internationally rather than domestically focused for its millions of customers.
And he smiles when he says that Luxembourg - unlike Britain - is staying at the heart of Europe rather than threatening to quit the EU.
Neither Mr Gremagna nor the Chinese banks based in Luxembourg feel that the country has a relaxed attitude to banking regulation.
But according to PwC's China expert Vincent Loy, this is one of the key reasons why many banks prefer doing business in the principality.
"I think that there's a perception that the regulations in the UK are very strict and that the costs of actually doing business in the UK is quite high for the Chinese banks," he says.
Mr Loy also says while the yuan will rival the euro and dollar within 10 years, the pace of the internationalisation of the Chinese currency will be strictly controlled by the People's Bank of China.
And last week, we got a timely reminder of this control when the seemingly unstoppable appreciation of the yuan was arrested.
The Chinese central bank said it was market forces but many believe it suited Beijing that the market was reminded that currencies can go down as well as up.
Despite the recent dip in the value of the yuan, the battle for control of China's Western financial centre will go on and probably intensify.
Whether London will beat Luxembourg is unclear. There will probably be a sharing of the business with London getting the foreign exchange side of things and Luxembourg managing much of the pension fund investments and trade finance.
It won't be long, though, before the yuan will be in bureaux de change around the globe, and tripping off the tongue as easily and as often as the pound, dollar or euro.