The Halal Exchange: Implications for Sino-Arab Cooperation
Halal restaurant in Beijing, photo by Zaynab El Bernoussi, March 2019
China’s global economic influence has had a profound impact on the Arab region, and in this blog I raise some questions around one understudied aspect of this influence: the halal trade. The halal economy is fast growing, and the Arab region has a majority of Muslims in its population, i.e. consumers of halal goods and services. What does this mean for the expansion of Sino-Arab cooperation?
In my research, I hope to explore this question in the broader context of deepening Sino-Arab relations, and the increasingly favorable background to Sino-Arab cooperation. I aim to show that a growing halal exchange is having a transformational impact on the development of South-South cooperation, which can challenge many of the ways we think about international relations today.
The ‘Halal Opportunity’
In 2021, the size of the Halal economy was just a few billion dollars short of reaching $ 2 trillion, and it is expected to almost double in volume by 2027[1]. The halal economy is growing fast, and China has the potential to play a major role in this expansion given the growing prominence of the Chinese economy and the country’s global political influence.[2]
Most halal consumers are found in the MENA (especially Gulf countries), Southeast Asia and Europe. There are also an estimated 500 million non-Muslim consumers of halal – indeed, halal restaurants in Hong Kong and Beijing are popular choices because of their reputation for hygiene and cleanliness.
Currently, China’s involvement in the halal trade remains limited. The country only contributes 1% of global halal trade[3] and, in 2020, the top world exporters of halal foods were Brazil followed by India[4]. Yet even with this small share of the halal business, China’s halal trade is very diversified and includes food, finance, tourism, media and recreation, cosmetics and pharmaceuticals, and fashion.
In 2014, the Hong Kong-based financial group, Mega Capital International Holdings Ltd became a central halal certification provider in the Belt Road Initiative (BRI) to Chinese manufactures thanks to a collaboration with Jakim, Malaysia’s Department of Islamic Development responsible for issuing halal certification[5], and a very trusted label by halal consumers worldwide.
Also, in 2015, China established the Wuzhong Halal Industrial Park in an interest to brand the country as a halal-friendly market and promote its local halal producers, notably the Chinese dairy company Yili that has been growing as an important exporter of halal milk products[6].
The ‘halal opportunity’ needs to be understood in the context of the Chinese authorities’ policy towards halal goods and services in China itself, particularly in relation to the troubled relationship with the Uyghur community of the Xinjiang province, which has triggered significant global condemnation. Indeed, over the last decade, several Chinese policies have targeted dissent in the Xinjiang region, including anti-halal campaigns to forcefully Sinicize the Uyghur[7].
China’s growing interest in the international halal business could thus be seen as part of its attempt to shape global governance, with halal used as part of an attempt to influence global public opinion, including around Xinjiang.
Global Partnerships
The ‘halal opportunity’ also supports the Chinese authorities’ interest in partnerships with Muslim majority countries, particularly in the Arab region (El Bernoussi, 2021). The importance of the halal economy also has a particular regional resonance for China, as many of its Asian neighbors are growing halal markets.
Indeed, Indonesia has recently passed a law requiring all foreign products to be halal certified to enter its market[8]. ASEAN countries have adopted a halal regional framework[9], echoing a similar long awaited political move by the Arab League countries to finally do so[10].
Since President Barack Obama and Secretary of State Hillary Clinton’s policy of ‘Pivot to Asia,’ China and the Asia Pacific region are increasingly viewed as an international priority by many countries. This pivot is also accompanied by the Asian region’s dominance of trade and biggest share of the halal economy compared to all other areas of the world.
In terms of exports, the key actors in the halal economy in the Asia Pacific region are Indonesia and Malaysia; however, given China’s supply driven contribution to the global economy, one can also see the potential of China becoming a major exporter of halal goods and services. Yet, because of China’s handling of Xinjiang, it is possible that there could be resistance to Chinese halal products.
Nonetheless, global consumption is likely to be driven overall by prices rather than by ethical values.
The Future of Sino-Arab Relations
To map the changes in the exchange of halal goods and services (exports/imports) between China and the Arab world, I will look at four key periods: 1) the early postcolonial era and the Third Wordlist aspirations in the 1950s; 2) China’s opening and economic reform in the 1980s; 3) China joining the World Trade Organization in 2000 and the Global War on Terror since 2001; and 4) incorporating the Middle East in the BRI since 2016.
Given the recent development of the COVID-19 pandemic, a fifth period could also be considered to evaluate the impact of the new health diplomacy that China has increasingly deployed towards Arab countries since 2020, and which builds upon China’s ‘pragmatic diplomacy’ towards the region (Sun and Zoubir, 2014).
Looking at growing Sino-Arab cooperation through these periods can help reveal the change in the two communities’ perspectives towards one another (e.g., trust in Chinese/Arab products and services, China as the next superpower, the potential for economic growth in the MENA region, and so forth), and contribute to advancing a process of economic integration at the regional level (particularly further integrating North Africa with the rest of the African continent).
It will also be interesting to map the discursive framing of China-Arab relations over these periods. The Sino-Arab connection is often framed through a ‘civilizational approach’ that emphasises a return to a supposed Golden Age between China and the Arab region. In this respect, China has particularly employed ‘nostalgia politics’ to integrate more global South partners into its revival of the ancient Silk Road (Benabdallah, 2021).
Nonetheless, in a recent China Africa Podcast, China specialist Elizabeth Economy noted the increasingly explicit global ambitions of China to assert its territorial claims but also lead global governance[11]. As a powerful global economic player, China is also likely to push the rest of the world to align with its economic and security interests, which have been centrally framed around the BRI.
For the Middle East, including the Arab region, this is likely to create a new regional security paradigm if US and European military assistance is replaced by Chinese trade assistance.
In this respect, a study of the halal industry can reveal much about the possible future trajectories of China and Arab relations.
[1] https://www.imarcgroup.com/halal-food-market
[2] Expectations of halal economy growth in post-COVID19 in Indonesia and China: https://www.foodnavigator-asia.com/Article/2021/01/20/Now-is-the-time-China-and-Indonesia-highlighted-as-major-post-COVID-19-opportunity-markets-for-halal-growth
[4] Dinar Standard Report, 2020.
[6] https://www.cnbc.com/2015/08/24/china-wants-a-bite-of-the-booming-halal-food-market.html
[8] https://www.aseanbriefing.com/news/indonesias-omnibus-law-halal-certification-to-impact-businesses/
And
[9] http://www.afsn.net/ASEANHALAL/
[10] https://www.prnewswire.com/il/news-releases/arab-countries-agree-on-new-framework-f
References
Benabdallah, Lina. "Spanning thousands of miles and years: Political Nostalgia and China's revival of the silk road." International Studies Quarterly 65.2 (2021): 294-305.
El Bernoussi, Zaynab. “Developing the Halal Market: China’s Opportunity to Strengthen MENA Ties and Adress Uighur/Hui issues,” in Rethinking Halal: Genealogy, Current Trends, and New Interpretation, Ayang Utriza Yakin and Louis-Léon Christians eds, Muslim Minorities Series (37), Leiden: Brill Publishers, 2021. https://doi.org/10.1163/9789004459236_006
Sun, Degang, and Yahia Zoubir. ‘China’s response to the revolts in the Arab World: A Case of pragmatic diplomacy’. Mediterranean Politics 19, no. 1 (2014): 2–20.