The global industry of halal is growing rapidly, projected to reach a value of $3.2 trillion by 2026. Even though Muslim-majority countries like Malaysia and Indonesia have been the main players, halal industry in China is starting to become more important. This is due to their strong manufacturing and international trade and their increasing curiosity about taking up halal certification.
While China has only a minority of Muslims, 22 million out of its entire population, constituting 1.8%, it sees this industry as part of its plan for economic diversification and an increase in its exports to predominantly Muslim countries. For China to make the most of this, there are problems that have to be faced and solved, among them certification credibility, market trust, and adaptation to culture.
Why is China Entering the Halal Market?
Their interest in the halal industry in China is driven by these key factors:
- Expanding business opportunities to diversify the economy
- Stronger trade with Muslim countries through the Belt and Road Initiative (BRI)
- Rising global halal demand, with the world’s Muslim population expected to reach 2.2 billion by 2030
- More interest from non-Muslim consumers who prefer halal products
- Utilizing e-commerce platforms to sell halal products globally
Key Strategies to Strengthen Halal Industry in China
Based on recent research on The Prospects of the Halal Industry in the Next 10 Years by Universitas Indonesia, Salemba Jakarta, China is taking its steps to:
1) Establishing Halal Industrial Zones
China is setting up special halal production zones in regions like Ningxia and Xinjiang, where there is a significant Muslim population. These regions are receiving government incentives, including tax exemptions and infrastructure development, to attract investment.
2) Strengthening Halal Certification
One of China’s main challenges is the lack of a unified national halal certification system. Currently, businesses must obtain local certifications that may not be recognized internationally. To address this, China is aligning with international halal standards to improve export credibility. They are also collaborating with Muslim-majority countries like Malaysia and Indonesia for certification recognition. To add more, they are developing a more transparent halal certification system to gain global consumer trust.
3) Expanding International Trade Agreements
China is actively signing bilateral trade agreements with Middle Eastern, Southeast Asian, and African countries to boost Halal exports. Additionally, China is participating in major halal industry exhibitions to strengthen its position as a leading supplier.
4) Leveraging E-Commerce for Global Halal Trade
With the rise of digital commerce, China is using e-commerce platforms like Shopee, Temu, Alibaba and JD.com to distribute halal-certified products globally. This allows Chinese halal products to reach markets in Europe, North America, and Muslim-majority regions more efficiently.
Challenges China Faces in the Halal Industry
There are also some barriers on China’s way to becoming a major player in the big halal market. Lack of trust in halal certification remains one of the largest issues. Many Muslim consumers and businesses alike are skeptical of the validity of halal products from China.
Another problem is a cultural barrier. As a non-Muslim country, it needs to ensure that the whole production of halal products moves according to Islamic principles. They are also highly exposed to the stiff competition of renowned traditional Halal nations like Malaysia, Indonesia, and the United Arab Emirates, which have been recognized worldwide for a long time.
Other issues are regulations: Most of the countries still don’t recognize Chinese halal certificates, which requires several different country certifications to ultimately be acceptable. These are a rather costly and lengthy process to handle.
In China, halal only involves foods such as meat, milk, and edible oils. Chinese regulations banned the use of the halal label for non-food products back in 2022. However, in many countries around the world, the certification of halal encompasses much wider products, such as cosmetics, medicines, and personal care items.
There are also issues related to supply chain and quality control. Ensuring consistent halal compliance throughout sourcing, production, logistics, and distribution is a challenging task. Some markets require strict audits and traceability that can slow down China’s ability to expand into certain regions. Not only that, China’s halal sector still lacks a clear identity in the world market. With lack of trust, Muslims may be less likely to purchase halal products from China.
The Future of Halal Industry in China
China is working its way to halal industry by making trade deals, building halal industrial zones, and improving certification standards. With its strong potential and global challenges, its success will depend on gaining trust, expanding strong partnerships with Muslim-majority countries, and investing in R&D to improve product quality and supply chain. With these strategies, China could improve its role to be a part of the global halal manufacturing hub.
Conclusion
When China enters the halal industry, it will have a significant impact. With its strong industrial base, growing trade partnerships, and investment in halal compliance, China has the potential to reshape the halal supply chain worldwide.
However, gaining consumer trust, improving certification processes, and addressing cultural barriers will be key to competing with traditional halal powerhouses like Malaysia and Indonesia. As the global halal market continues to expand, businesses and policymakers should closely watch China’s strategic moves, as they could reshape the industry’s future.
