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Friday, October 10, 2008

Global Islamic Market

Mohammed Yussuf picks up a giant onion and smiles as he admires it. The vegetable on display at a trade fair here pleases him not only because of its proportions; the onion's main virtue in his eyes is that it is halal, acceptable on Muslim dining tables.

Mr. Yussuf, a Malaysian businessman, makes a tidy profit importing halal foods from this remote corner of northwestern China. He's the type of foreign trader this Muslim region hopes to attract more of, in its bid to grab a slice of the multibillion dollar global Islamic food business.

"One-third of our population is Hui," says Ma Yingqiu, this city's deputy mayor, referring to the Muslim ethnic minority who live in the Autonomous Region of Ningxia. "They have the same habits as people in Islamic countries. They are this region's competitive advantage."

As the local government strives to forge new economic ties with Middle Eastern and other Muslim nations, citizens of this impoverished part of China bordering the Gobi Desert are rediscovering Islam. Emerging from centuries of religious isolation, Ningxia Muslims are developing "an international sense of community," says Ma Ping, head of the Institute of the Hui and Islam here.

While that might once have unnerved the Chinese government, always uneasy about divided loyalties, Ningxia's desperate economic straits – it is the country's third poorest province – have prompted a rethink, says Professor Ma.

"Stability used to be the top priority here, but now it is development," he says. "What the government wants most is money."

It was in search of money that the Ningxia government last week held the third annual International Halal Food and Muslim Commodities Trade Fair, which closed here over the weekend. "This fair is Ningxia's chance to march into the world," provincial governor Wang Zhengwei proclaimed at the opening ceremony.

For four days, local producers manned stands offering meats and vegetables, which Hui Muslims consider halal if they don't use manure made from human or animal excrement to grow them. Vendors also sold clothes, ceramics, and other goods aimed at Muslim consumers.

Yussuf was one of the few foreign buyers at the fair, however, and his supplier, Ma Shengke, seemed to be one of only a handful of success stories so far in Ningxia's efforts to break into the competitive Islamic food market.

Most producers are having difficulty carving out a niche, a challenge to all newcomers but one that is heightened for Ningxia's would-be exporters by the recent rise in the value of the Chinese currency, which makes their goods more expensive on world markets.

"We have lost our price advantage, so the solution is to produce better quality meat," says Zhang Hongen, a local sheep farmer. "We need to impose standards."

Ningxia's halal food industry is worth nearly $700 million a year, according to government statistics, but less than 3 percent of its output is sold abroad, Ma Yingqiu points out. "We are still at the beginning of this and we have to work on it," the deputy mayor acknowledges. "But since we are starting from such a small base, it should be easy to grow fast", reported by

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