Employees pack halal food at Hongshanhe Muslim Food Co Ltd in Yinchuan. [Photo / China Daily]

One city is finding there are handsome profits to be made from Muslim food

Yinchuan, the capital of Northwest China's Ningxia Hui autonomous region, is reaping large benefits as it nourishes the ever growing trade in halal food - prepared as prescribed by Muslim law - between China and the Arab world.

In the past two decades, Yinchuan and the region had relied heavily on selling machine tools, activated carbon, garments, electronic and cashmere products to developed economies, including Australia, Europe, Japan and the United States.

However, the global financial crisis of 2008 severely dented the region's export earnings because of its reliance on these economies and caused a rethink about its overseas trade.

Ma Li, the mayor of Yinchuan, says: "To restructure our export markets and products, we started to target the world's Muslim communities to export halal food and to develop a new market growth point, especially to the markets of the Middle East, Southeast Asia and a part of Central Asia."

Ningxia is China's only provincial-level autonomous region for the Hui ethnic group, who have strong cultural, religious and business connections with Muslim countries.

"Even though Yinchuan's GDP cannot compete with China's coastal cities at the moment, focusing on specific market regions we are familiar with is a useful way for inland cities such as us to increase trade," Ma says.

Amid economic globalization and regional integration, the economic and trade ties between Yinchuan and the Arab world are becoming increasingly close with the rapid rise of bilateral trade.

Trade between Yinchuan and Arab nations was worth $1.42 billion last year, 3.5 percent more than in the previous year. Yinchuan's halal food industry accounted for 47 percent of the region's export quota last year, Yinchuan customs says.

Tian Yunhe, president of Ningxia Jingyitai Halal Food Co Ltd, says business travelers from Arab states to Yinchuan are interested in buying not only daily necessities such as shoes and clothes, as they did previously, but also halal food, which is made in Yinchuan and finds bigger markets in the Middle East, especially during important Islamic festivals.

"The annual Muslim pilgrimage to Mecca lifts demand for food in Saudi Arabia significantly," Tian says. "Every year the city's catering and service industries need to import a huge amount of food from countries such as China and Pakistan, whose prices are lower than for similar products imported from Qatar, Jordan, Egypt and Algeria."

Even though high-end halal food is largely needed for wealthy Muslims during the Haj, convenient fast halal fast food is still the first choice for most Muslims who travel from other parts of the world, Tian says. Low price, fast delivery and a direct sales network are essential in winning long-term customers in this important regional market.

The company spent five years with China Agricultural University and Ningxia University to develop technology to freeze convenience foods, and says it is the first company in Yinchuan to provide Haj meals in Mecca.

To increase market share, the company, with 380 empolyees, began a project last year to deliver 10,000 metric tons of frozen meals to Mecca within three years.

The company's sales to Saudi Arabia last year were worth 42 million yuan, 14 percent more than a year earlier. The company has also built a warehouse near King Abdulaziz International Airport in Jeddah, close to Mecca.