Industry News

One city is seeking substantial economic benefits from Muslim food.

Yinchuan, the capital of the Ningxia Hui Autonomous Region in northwest China, is reaping significant benefits from its booming halal food trade, which complies with Muslim law and is carried out between China and Arab countries. For the past two decades, Yinchuan's economic development has relied heavily on exports of machinery and tools, activated carbon, clothing, electrical appliances, and cashmere products to Australia, Europe, Japan, and the United States. However, the 2008 global financial crisis severely curtailed the region's export earnings, leading to a rethinking of its dependence on exports and overseas trade.

Yinchuan Mayor Ma Li stated, "To restructure our city's export markets and products, we aim to export halal food to Muslim consumers worldwide and develop a new market growth point, particularly in the Middle East, Southeast Asia, and parts of Central Asia." Ningxia, China's only provincial-level autonomous region, is home to the Hui ethnic group, who have close cultural, religious, and commercial ties with Muslim countries. Ma Li added, "Although Yinchuan's GDP currently doesn't compare to coastal Chinese cities, focusing on developing specific markets we are familiar with is an effective way for inland cities like us to increase trade." With the rapid development of economic globalization, regional integration, and bilateral trade, Yinchuan's economic and trade ties with Arab countries have become even closer. Yinchuan Customs data show that last year's total trade volume with the Arab world reached US$1.42 billion (€1.06 million), a 3.5% increase over the previous year. Halal food exports accounted for 47% of Yinchuan's total exports.

Tian Yunhe, Chairman of Ningxia Jingyitai Halal Food Co., Ltd., noted that business travelers from Arab countries visiting Yinchuan are not only interested in traditional necessities like shoes and clothing, but also in Yinchuan-made halal food, which has found a larger market in the Middle East, especially during major Muslim festivals. Tian stated, "The annual Muslim pilgrimage to Mecca significantly increases demand for food from Saudi Arabia. Every year, the catering industry imports large quantities of food from countries like China and Pakistan, as these countries offer lower prices than Qatar, Jordan, Egypt, and Algeria." "While high-end halal food attracts wealthy Muslims during the Hajj, convenient halal fast food remains the preferred choice for most Muslims worldwide." Tian stated that in this important religious market, affordability, speed, and a direct sales network are essential factors for winning long-term customers. Our company, which spent five years developing convenient food freezing technology in collaboration with China Agricultural University and Ningxia University, is the first company in Yinchuan to provide halal food to Mecca. To increase market share, the company and its 380 employees began a project last year: to deliver 10,000 tons of frozen foods to Mecca over three years. Last year, the company's trade sales in Saudi Arabia reached 4.2 million RMB (514,000 EUR), a 14% increase over the previous year. The company has established a warehouse near King Abdulaziz International Airport in Jeddah, near Mecca.

The Ningxia Department of Agriculture and Animal Husbandry noted that Yinchuan enjoys superior raw materials for developing a halal food industry compared to other coastal provinces in China, including 303,600 head of cattle, 158,000 head of cows producing 440,000 tons of milk annually, 5.34 million sheep, and 7,467 hectares of organic rice paddies. Yinchuan Laoheqiao Halal Food Co., Ltd. is a halal meat supplier, accounting for 21% of Yinchuan's halal meat exports to the Middle East. Due to increasing orders from the Arab market since February, the company plans to build a new slaughterhouse in northern Yinchuan in October. The company currently operates a slaughterhouse, a small leather tannery, and 38.1 hectares of cattle and sheep farmland. "Muslims only eat livestock that have been cut in the neck by a sharp knife from a slaughterhouse," said Ma Tianyi, Vice Chairman of Yinchuan Laoheqiao. "Over 70% of our employees are Hui people, and we strictly adhere to Muslim customs, including the diet of cattle and sheep and the timing and conditions for slaughter," Ma said. The company's operations encompass 42 hectares of livestock farmland located in the Yellow River and Helan Mountain area. Last year, 53 tons of halal lamb were shipped from there to four Middle Eastern countries, including the UAE, Qatar, and Kuwait. Ma stated that there are still numerous attractive North African markets to explore, but that the company needs to develop new development strategies and rethink its market positioning. "If we don't understand the needs, culture, and perspectives of Arab consumers, it will be difficult to further develop business relationships and long-term cooperation with them," Ma said. The company is evaluating the possibility of establishing a sales office in Amman, Jordan, next year. However, the varying understandings of halal food among Muslims present a significant barrier to business. To address this issue, China has begun promoting halal food certification on the global stage, fostering wider awareness and understanding. The Yinchuan Ningxia Halal Food Certification Center has signed agreements with counterparts in countries such as Australia, Egypt, Malaysia, New Zealand, Qatar, and Saudi Arabia to strengthen mutual recognition of certificates. The Middle Eastern market is not the ultimate goal for Yinchuan companies. Some businesses are also finding favor in Southeast Asian Islamic countries, where economic growth offers promising prospects for increased halal food consumption.

For three years, Hongshanhe Muslim Food Co., Ltd. has exported a wide range of Muslim food products, from pastries to condiments and butter, to Malaysia and Qatar. The company plans to establish a 3,330-hectare plantation in southern Ningxia by the end of the year to grow chili peppers and other vegetables to support production. Hongshanhe Vice President Wang Xiang stated that halal food is consumed not only by 1.5 billion Muslims worldwide, but also by at least 500 million non-Muslims. "However, China's halal food exports only account for a small percentage of global exports, indicating that China's halal food industry still has significant room to compete in the global market," Wang said. To attract more Muslim consumers, Hongshanhe invested $450,000 last year in a new English-language website and is promoting its products in Malaysia and Qatar through magazine and online advertising. Halal food shipments to Malaysia and Qatar have reached a total value of $21 million.