If you build it ... ?

Photographer: Goh Chai Hin/AFP

China's Weird Plans to Lure Muslims

Adam Minter is a Bloomberg View columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade.”
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Officially atheist China, the world's biggest pork consumer, isn't the most natural location for producing food in accordance with Islam's strict halal standards. But that didn't stop a delegation of Malaysians from traveling to China recently to consider investing in a government-sponsored "global halal park" capable of exporting food to the Muslim world.

The opportunity, theoretically, is immense: The halal food industry was worth $1.1 trillion in 2013, and Chinese producers make up a mere 0.1 percent of it. But expanding that market share won't be easy.

Over the years, innumerable scandals have badly damaged China's reputation as a food producer. Meanwhile, government restrictions on religious practice call into question whether regulators and producers will sincerely follow halal guidelines, or tolerate some laxity. How the government addresses these issues will determine how successful its halal ambitions are -- and also help define China's relationship with the larger Muslim world.

That relationship is increasingly important. Under President Xi Jinping, China has started a multibillion-dollar initiative to resuscitate and expand the ancient Silk Road through Central Asia to Europe. "One Belt, One Road," as it's known, envisions new railways, highways, and ports bringing trade and growth for China -- and especially its Western provinces, home to most of the country's 23 million Muslims. Chinese officials and entrepreneurs want to leverage that opportunity, and are even encouraging Shariah-compliant finance schemes

That's where halal products come in. China is already home to domestic halal producers, but officials would like to transform them into exporters. Much like its broader food industry, however, China's halal businesses are hobbled by frequent embarrassments. In 2013, for instance, police in Xi'an seized 20 tons of pork that was being marketed as halal beef. Unsurprisingly, local Muslims have come to trust imported products more. But that's no protection from fraud either: Some of China's halal factories are now mislabeling locally produced goods as imports from Muslim countries. Needless to say, none of this helps the case for Chinese exports.

Equally damaging is China's long-standing and tightening regulation of religious expression. In recent years, some local governments have banned Muslims from fasting during Ramadan. Yet these are the same governments that China's trading partners are expected to trust in regulating halal food. Predictably, they don't: In Ningxia Province, aspiring exporters report that the local government's much-touted new halal certification standard is "completely useless" when it comes to promoting trade.

Enter the Malaysians. In the 1970s, Malaysia unveiled a national halal standard that today is a benchmark for producers and consumers worldwide. Domestically, it has given rise to 13 "halal parks" and an industry that accounts for around 5 percent of exports. China's halal aspirants would love to replicate that success. If the Malaysians would simply invest in the Chinese halal industry, the thinking goes, perhaps some of their savvy would rub off.

That's unlikely. Since 2002, China has contemplated a national halal certification law of its own, but prospects for such legislation are bleak. It's possible that Chinese producers could adapt Malaysia's standard, and establish a Foxconn-like model for making Apple-standard halal food.

But so far there's little evidence that the Muslim world has much interest in China's secularized vision of Islamic consumption. In Ningxia Province, China's efforts to promote itself as a center for international Muslim travelers have produced little more than a giant, empty Islamic theme park. Two years ago, during a week-long trip to Ningxia, the only foreigners I saw in the city's hotels were from Europe.

That has to be a disappointment for a Chinese government keen to promote its western regions as places where Muslims can do business. But it suggests a lesson for China's nascent halal industry: Some things matter more than commerce.   

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Adam Minter at aminter@bloomberg.net

To contact the editor responsible for this story:
Timothy Lavin at tlavin1@bloomberg.net