China turns to its Muslims in Arab trade push

YINCHUAN (NINGXIA): When Chinese officials discovered a business opportunity in the fast-growing West Asian Halal food market, they turned to Wang Meng, who prefers to introduce himself as “Sayyid” when he meets foreigners.

Twelve years ago, Mr. Wang, who is from China’s Hui Muslim minority group, founded a Halal food company in Beijing to cater to the dining requirements of the city’s Muslim community.

In a country where pork is the dominant meat, consumed in every restaurant and found on most dinner tables, Mr. Wang felt there was a crying need for a brand of food that ensured the strictest quality control – a brand, he said, that Chinese Muslims could trust.

“As a Muslim, I wanted to do something for my community,” Mr. Wang said. “So I started this business, from the heart.”

Today, Mr. Wang’s Xiangjuzhai Foods Group is one of Beijing’s biggest Halal food suppliers, and has been approached by the Chinese government to play a role in its ambitious plans to build a dominant Halal foods export industry to cater to West Asian markets.

With the support of the Chinese government, Mr. Wang’s company will, next year, begin exporting its Halal-certified products to West Asian countries, Malaysia and Indonesia, at competitive prices that traders say will challenge dominant Halal exporters around the world, from Brazil to India.

China’s growing Halal trade is only one part of a wider push to expand ties with the Arab world beyond oil, which, at present, makes up a bulk of trade. China is dependent on the region for its growing energy needs, importing 55 per cent of its oil.

This week, China launched its biggest effort yet to tap West Asian markets in Yinchuan, the fast-growing capital city of Ningxia, a dry desert land home to the Hui. Ningxia, where 2 million Hui Muslims live, making up a third of the population, is being developed into a “strategic centre” for China’s West Asian trade push. The Chinese government is looking to leverage the region’s religious and historical connections to the Arab world – Huis descended from Muslim traders who travelled to China on the Silk Road – to boost trade ties with Muslim countries.

In Yinchuan, the government this week sought Arab investment in the construction of a $ 300 million industrial park, four five-star hotels and a number of infrastructure projects listed in its Five-Year Plan, announced earlier this year.

“We are adjusting our economic structure and focusing on specific industries, like energy, chemicals, and food and agricultural products,” to cater to Arab markets, Ningxia’s Governor Wang Zhengwei told trade ministers and investors from Arab countries this week.

While oil continues to remain at the heart of trade ties, Chinese exports, from machinery to textiles, have surged over the past decade.

China’s exports with the six Gulf Cooperation Council (GCC) countries – Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Bahrain, Oman and Qatar – which account for more than 60 per cent of China’s trade with the region, rose from $ 3 billion in 2000 to $ 30 billion in 2009. By 2020, China is forecast to become the GCC’s most important trading partner, surpassing the roles of Europe and India, which, unlike China, has deep cultural links with the region.

China’s plans, in the food processing sector for example, will have an impact beyond the region. Mr. Wang said Ningxia was in the process of setting up a Halal certification system – along with Malaysian help, to boost its credibility – and had received the support of Qatar and the United Arab Emirates.

Earlier this year, the Ningxia government also started a joint venture with a Malaysian company, the Fahim Science and Technology company, to set up a production base and export centre for “Muslim products” in Ningxia. According to the local government, nearly 10,000 companies are now involved in Ningxia’s Halal food and Muslim products industry, which generates an annual output of $ 3.7 billion.

The moves were welcomed by Abdullah Ahmed Al-Saleh, Under Secretary of Foreign Trade of the UAE, who said there was “huge potential” in trade cooperation on Halal food.

“There is a growing demand for Halal food around the world, and it can become an important element in economic and trade relations,” he told Chinese companies.

Mr. Wang, of the Xiangjuzhai food company, said Ningxia’s preferential policies for “Muslim products” had led him to invest in a factory near Yinchuan.

With government support, low investment costs and huge infrastructure investments in Ningxia’s processing centres, companies like his, according to many traders at this week’s fair, will pose a serious challenge to the Brazilian, Australian and Indian players who are, at present, dominant in the Halal foods market.

At this week’s fair, he said, a number of Malaysian and Indonesian investors had expressed interest in his Halal products, from traditional Chinese mooncakes to bread. Mr. Wang will also visit India later this year, to meet with potential trading partners.

“The Halal market in China is growing every year,” he said, pointing to rising consumption and a fast-growing middle-class. “But our focus from now,” he added, “will be overseas.”