Ningxia to Host China-Arab States Trade Forum

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Aug. 30 – Yinchuan, the capital city of Ningxia, will host the first China-Arab Trade Forum in a bid to further align itself with Arabic investment in hopes of securing petro-dollar investments.

Yinchuan is an ancient Silk Road city with a strong population of Muslims, many of them Arabic and Persian descendants of early Silk Road travelers. The Bank of Ningxia launched an Islamic services unit last December, which applies Shariah law to lending practices. Since then, the unit has conducted more than RMB70 million worth of business, demonstrating that there is a market for such services.

The forum will be held on September 26-30 and will be an important platform for all-round cooperation between China and the Arab nations, which have a common task of development, said Fu Ziying, vice commerce minister of China. To date, about 300 Arabic companies are sending delegates. Senior Chinese leaders also scheduled to attend.

Ningxia, China’s only specifically Muslim autonomous region, also hopes to attract investment from the Arab League’s 22 member states. In 2009, bilateral trade between China and the Arab states hit US$107.4 billion, compared to US$36.4 billion in 2004. Ningxia is home to 2.17 million Muslims. They make up over one-third of the autonomous region’s population and account for more than 10 percent of China’s total Muslim population of 20 million.

Arabic investors steer clear of investments in non-Islamic industries such as gambling and alcohol, while Islamic law also prohibits the charging of interest on debts. Hong Kong has also invested in Islamic banking services. Yinchuan is also connected to Dubai with routes through Shenzhen commencing from May this year, something that has also helped with the boosting of trade in Halal products.

Two cities in Ningxia, Helan and Wuzhong, are currently developing halal meat processing factories, and the Malaysian government approved a halal certification center in Yinchuan last March. The Saudi government is also in negotiations with the government of Ningxia over providing halal certification for the Saudi market for Ningxia products. Islam requires strict observance over food preparation and a religious leader should be on the premises to ensure compliance.

Dezan Shira & Associates can provide assistance with investment into Ningxia. Please contact

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(The January/February 2003 issue of China Briefing that features a strategic market report on Islamic businesses in China, complimentary download)