Luxembourg formally endorsed China’s Belt and Road Initiative (BRI), a massive infrastructure plan to build trade networks between Asia, Europe and Africa that has led to accusations of economic imperialism.

During a visit to China, Prime Minister Xavier Bettel on Wednesday signed a memorandum of understanding with his Chinese Premier Li Keqiang to cooperate on the ambitious global plan.

Luxembourg had been supportive of the initiative before, but the formal agreement was hailed as a new step by Bettel.

“The signing of this agreement marks a new stage in the development of China-Luxembourg relations and our cooperation in economic and commercial, academic and cultural terms as well as in research and development,” Bettel said at a signing ceremony.

The agreement comes days after Italy became the first G7 nation to formally endorse China’s plans. Since then, Italy has been considering taking out a loan from the China-led Asian Infrastructure Investment Bank (AIIB), of which Luxembourg is a shareholder.

Some are praising the BRI as a motor for growth and regional cooperation. But the US and large European countries worry that it creates debt traps for countries that are the target of investments, and that Beijing uses it to further its strategic and military influence.

Besides Italy and now Luxembourg, the BRI is widely supported in Eastern Europe in the EU, and by Greece and Portugal. France and Germany have displayed a more wary approach.

Today’s signature was followed by four agreements between the Luxembourg Stock Exchange and the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the Shanghai Clearing House and the Bank of China, the details of which are under embargo until midnight.

Luxembourg has close economic and financial ties to China. Seven of the largest Chinese Banks have their European Headquarters in Luxembourg.

In January, Luxembourg and Hong Kong Financial watchdogs signed an agreement intended to boost fund sales into each other’s markets. The Grand Duchy is also gearing up to host the annual meeting of the AIIB in July, the first time the summit will be hosted outside Asia.

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