Held in the western city of Xining in Qinghai province, a major sheep producing region, the expo featured almost 1,000 exhibitors, according to organisers. Among those showing their wares were Changchun Haoyue and Inner Mongolia Kerchin Cattle Industry Co – Chinese beef and lamb processors who both sell packaged meat under Chinese halal certification.
The large processing capacity of China’s meat companies gives the country an edge in the halal export trade, said local officials. "We aim to become one of the world’s leading exporters of halal meat and other food products. This is a market of 1.6 billion people and China has the processing ability to capture some of this [market]," said Wang Xihui of the Qinghai branch of the China Centre for the Promotion of International Trade. Wang’s guests at the event included a representative of the Arab League along with officials from China’s Muslim-majority neighbours, including Pakistan, Kyrgyzstan and Tajikistan.
Chinese government data suggests China currently has a 0.1% share of the global halal food market. Vendors at the Qinghai show admitted that certification remains a weak point, with a lack of recognition of China’s certification a key obstacle to building shipments to the Arab world. Halal is known in China as ‘qing zhen cai’ or ‘pure truth food’ – restaurants in Beijing regularly feature ‘qingzhen’ nameplates over the door. Certification has traditionally been overseen by the China Islamic Association (CIA), a government body, as well as the State Ethnic Affairs Commission, another government bureau.
China’s food companies have good reason to become halal-certified, given the country has a 20 million-strong local Muslim population, many of them (nine million) part of the local ethnic-Chinese Hui grouping and another 8.4 million Uyghurs, a Turkic grouping native to the western region of Xinjiang.
Chinese halal meat producers have thus far been getting by on local certification: among them Zhi Wei Zhai Halal Co in the populous central province of Henan, which has been growing a processing business as well as a halal restaurant chain. Its only certification is from the local Ethnic Affairs office, a government bureau overseeing China’s ethnic minorities. "We are slaughtering 300,000 sheep a year and we are expanding our logistics operations and restaurant chain as there is big demand for halal meat in China, it has a good reputation for safety," explained a company spokesman. Profit margins of 30% at Zhi Wei Hai are higher than non-halal firms, he added.
As Chinese meat and food firms look to global sales, the national government has set some ambitious goals for Yinchuan, the capital of the northwestern Ningxia province. Aside from a bonded zone for halal food processors, the provincial capital, Yinchuan, is also set to have a Muslim Trading and Logistics Centre as well as an Islamic Finance Centre. The latter goal may be ambitious given China’s currency remains non-convertible but an expansion of Arabic language programmes at local universities and the promise of an International Certification Centre for Islamic Food – also promised for Yinchuan – would give local halal processors a boost in their bid for international markets.
China’s growing trade ties to the Middle East provide leverage. The large east coast city of Yiwu, known for small consumer goods, has drawn a large population of Arab traders (the city exports almost 50% of exports to the Middle East). Now the city has teamed up with the province of Qinghai to ship meat as well as consumer goods.
An advantage for China is the ability of its bureaucracy to draw in trading partners to conferences and trade arrangements. China’s emergence as an importer of resources has made it sought out as an alternative source of investment and trade, explains Ben Simpfendorfer, a Hong Kong-based investment banker and partner at Silk Road Associates, specialised in Sino-Arab trade flows.
Held each September, the China-Arab States Expo has been geared by Beijing as a platform to promote trade between China and the Arab states. Held in the capital of the Ningxia Hui autonomous region, the conference last year drew Arab leaders, including King Abdullah II Bin Al-Hussein of Jordan and King Sheikh Hamad bin Isa Al-khalifa of Bahrain while Kuwait was the "guest country of honour" at the event which also featured a trade expo of local halal food producers.
Similarly, China’s free trade agreement with the Association of Southeast Asian Nations gives the country’s halal producers access to the massive halal markets of Indonesia and Malaysia, as well as Brunei. A deal on mutual recognition of halal certification with Kuala Lumpur potentially provides Chinese firms with export opportunities to Malaysia, a Muslim-majority nation that exports US$11.5 billion per year worth of halal products (not just meat), making up 5% of its overall exports.
Yet Chinese firms aren’t alone in seeking a share of the global halal food market. Japan has also been eyeing halal exports - a Japanese venture capital company has teamed with a Malaysian state investor to launch a $50 million fund with money from Japanese banks to invest in Japanese food processing firms to get certified and geared up for halal exports.