Snapshot: China

Hui halal hub bringing back Silk Road trade between China and Gulf

By RJ Whitehead

- Last updated on GMT

Related tags: Halal food, United arab emirates, Halal

Hui halal hub bringing back Silk Road trade between China and Gulf
Ningxia Hui Autonomous Region in northwest China is home to 10% of the country’s 20m Muslims. While by no means does it have a majority Muslim population, the strong Islamic tradition by the ethnic Hui people of this Silk Road region dates back to its links with the Arab world when it served as a place of exchange for Chinese and Arabian cultures in ancient times. 

Today, the region has more than 120 companies engaged the halal industry, with a production volume of more than RMB8bn (US$1.27bn) last year. Halal beef, mutton and dehydrated vegetables are also exported to the United Arab Emirates, Kuwait, Jordan and other countries.

In spite of this concentration, that is pretty much as far as halal – known locally as qingzhen​ – goes in China, the industry accounting for just a meagre percentage of the world's total exports. For the last few years, the amount of halal food shipped from the country has remained flat at US$100m – to a backdrop of a world export market worth hundreds of billions.

Ready potential

For some, though, this can be read as potential, with plenty more to tap into, not least since Ningxia has now become firmly established as China’s halal hub and is slowly gaining prominence with the wider world. This is on the back of the central Ministry of Commerce issuing a development plan for the industry last year.

Since then, the region has set up a pilot zone with three production and service bases to target the Arab world, and five centres for promotion, logistics and certification.

On the thorny subject of halal standards, the Halal Food Certification Centre in Ningxia signed agreements in 2011 with its counterparts in the GCC and Egypt to grant mutual recognition of their standards. This move followed similar agreements with Malaysia, New Zealand and Australia.

This international standard is important in a country where more than 97% of cities and counties have halal food manufacturers, according to China Inspection and Quarantine magazine.

Certification confusion

In China, halal food producers must have their products certified by local ethnic affairs commissions under regulations passed by provincial and regional lawmakers. If they meet the standards, producers are allowed to display a halal logo, designated by province or region, on their packaging and products. 

While certification differs on a local level, the Ningxia must operate to international standards, so the region’s regulations were updated at the time of the GCC and Egypt agreements. They are much stricter than the rest of the country: for example, further than the national requirements the owners of halal processers must be Muslim, in Ningxia even managers and key workers must also follow the religion. Animals are also blessed with prayers before slaughter.

"In collaboration with the local administration for industry and commerce, we conduct random inspections, covering everything from large slaughterhouses to small noodle restaurants, to ensure that no one carries out non-halal activities in these places​," Ding Yi, director of the halal certification management office in Ningxia, told Xinhua.

Before China can unify its halal logo – of which there are currently a multitude, each one naming the town of manufacture – it will first have to codify the multitude local regulations into a national law.

"Once the law is passed, we will be able to establish a national standard, and the halal logo is a part of that​," said Jin Chunzi of the State Ethnic Affairs Commission, who has spent the past eight years working on the formulation of the country's first law on halal foodstuffs.

Although she declined to specify a timetable for passing the law, she said legislation regarding halal food at national level is in progress. "We held a competition to design national halal food logos last year. Five designs were chosen and earlier this year they were sent to local ethnic affairs commissions for consultation​." All five logos display the word halal in Chinese, English and Arabic. 

Overseas trade

As Ningxia continues to cement its status as a halal hub, increasingly more overseas companies and trade delegations have been touching down there to explore its potential.

The UAE, no stranger to foreign investment, has sent several delegations over the last three years and its trade minister, Sheikha Lubna Al Qasimi, has voiced her hope for strategic partnerships and more open export channels will follow.

This year, the Ningxia Light and Textile Industrial Bureau signed an agreement with Malaysia's East Economic Region to seek investment opportunities in the global Halal food industry.

According to Ong Chong Yi, who heads up economic affairs at the Malaysian embassy in Beijing: “China can leverage Malaysian expertise in halal certification to expand its market to Muslim countries all over the world, while Malaysia can export more varieties of its halal food products to the Chinese market​.”

Moreover, one Malaysian company is preparing to open its own production facility in Ningxia later this year. Rotiboy Bakeshoppe will also seek a sole franchisee from the Chinese region to use longstanding Ningxing-Arab distribution channels to develop markets for its bakery products in the Gulf and Egypt, as well as open up a supply base to South Korea and Indonesia.

Ningxhia’s regional authorities have also sent out an invitation to Pakistani businesses to negotiate joint-ventures with local businesses.

The indications suggest that China’s halal industry does have the potential to increase its single-figure share in the world’s export market. From this, there’s a very real possibility that the ancient Silk Road might once again open up.

Related topics: Markets, East Asia, Asian tastes, China

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