Compared with China's coastal provinces, Yinchuan enjoys fine raw materials to develop the halal food industry, including 303,600 cattle for breeding, 158,000 cows for livestock with milk production capacity of 440,000 tons a year, 5.34 million sheep for breeding and a 7,467 hectare organic rice base, Ningxia's agriculture and animal husbandry department says.

Yinchuan Laoheqiao Halal Food Co Ltd, a halal meat supplier, accounts for 21 percent of Yinchuan's halal meat sales to the Middle East and plans to build a new slaughterhouse in north Yinchuan in October, because the orders from Arab markets have risen markedly since February.

The company now owns a slaughterhouse, a small fur factory and a total of 38.1 hectares of separate breeding grounds for livestock, raising both cattle and sheep.

"Muslims only eat meat from livestock slaughtered ritualistically at their necks using a sharp knife," says Ma Tianyi, vice-president of Yinchuan Laoheqiao.

"More than 70 percent of our staff are Hui and we follow strict Islamic rules about what the cows and sheep eat and drink, when slaughter can be carried out and under what conditions," Ma says. The company's premises, between the Yellow River and Helan Mountain, have 42 hectares of breeding grounds for livestock.

They delivered 53 tons of standard halal mutton to four Middle Eastern countries last year, including the United Arab Emirates, Qatar and Kuwait. Ma says there are still a number of attractive markets in North Africa worth tapping, but to do that, companies need to come up with new growth strategies and have an idea about market segmentation.

"If we don't understand the needs, cultures and thoughts of Arab consumers, we can hardly develop further business relationship and long-term cooperation with them," Ma says. The company is now assessing the possibility of setting up a sales office in Jordan's capital, Amman, next year.

However, Ma says there are still different interpretations about halal food among Muslims - and that is becoming an obstacle to the business.

To solve this problem, China has already started to bring its halal food certification to the world arena for wider recognition. Ningxia Halal Food Certification Center in Yinchuan has signed agreements with counterparts in countries such as Australia, Egypt, Malaysia, New Zealand, Qatar and Saudi Arabia to grant mutual recognition to their certifications.