$1 trillion investment in ‘One Belt One Road’ to boost GCC Halal market
The $1 trillion investment by China in its ‘One Belt One Road’ initiative is expected to accelerate the growth of the $50 billion (AED183 billion) GCC Halal food market and global Halal economy and make Halal products much cheaper to the Middle Eastern consumers, organizers of the forthcoming Halal Expo Dubai, says.
Spanning more than 68 countries and encompassing 4.4 billion people and up to 40 percent of the global GDP, China’s One Belt, One Road project will create a direct land-link with the Middle East markets where it could roll out an increase volume of Halal products – be it food, hygiene, health, perfume and cosmetics.
The country, with a 26 million Muslim population, has a flourishing domestic halal industry and continues with efforts to strengthen the halal ecosystem in the country.
“Gaining credibility in the global halal food market is crucial for China to increase its presence. The country is already the highest exporter of modest fashion to OIC countries and has a high potential in terms of catering to the rapidly increasing demand for global halal food market, which will cross $1.7 trillion by 2021,” Mohammed Saleh Badri, Secretary General, International Halal Accreditation Forum (IHAF), said in a recent statement.
China has also created infrastructure to support the halal trade, including the construction of halal food and Muslim supplies manufacturing hubs such as the Wuzhong Halal industrial park, in the Muslim stronghold of Ningxia, which has attracted 218 companies.
In 2008, China formed its first halal foods certification centre named Ningxia Halal Foods International Trading Certification Centre, which created the General Provisions of Halal Food Certification in March 2013 with approval by the China Certification and Accreditation Administration in September 2014.
A credible halal food certification is crucial for China to develop trust in these products on a global level. The government is yet to come out with national law or regulations for the industry.
China continues to be the UAE’s top trade partner, with total bilateral trade exchange amounting to Dh170.2 billion (US$46.37 billion) in 2016, according to the UAE Ministry of Economy statistics.
The GCC countries import US$50 billion (Dh183 billion) worth of Halal products, according to a latest research by Farrelly and Mitchell – a food and agri-business specialist. Of this, the UAE’s Halal import bill is $20 billion (Dh73 billion), or about 40 per cent of the GCC’s Halal imports.
“Chinese investment in One Belt One Road initiative will definitely accelerate the growth of the global Halal consumption, as it will reduce the cost of mass production and overland transport costs across Asia, Europe, Middle East and Africa – the world’s largest Halal market,” Raees Ahmed, Director of Orange Fairs and Events, organizer of the Halal Expo – Dubai, 2017, says.
China’s halal sector is expected to reach $1.9 trillion by 2021, a CAGR of 9 per cent from 2015, according to research.
China has a strong domestic demand for halal foods, estimated at $20 billion coming from the 26 million Muslim consumers. Even though China’s Muslim population is only 2 per cent, majority are settled in Northwest China including Xinjiang, Ningxia, Gansu and Qinghai provinces, accounting for 70 per cent of the total Muslim population in these regions.
“The Muslim population is also younger than the national average and with more than 41 per cent of being younger than 19 years. This age profile and increase in the Muslim population are the key long-term drivers for domestic halal food consumption in China,” Ahmed says.
“Halal foods are considered to be healthy and hygienic. A growing number of non-Muslim consumers prefer halal foods, as they are deemed safer. As a result, the distribution of halal foods has expanded beyond traditional markets in cities such as Shanghai which has 80,000 Muslims. China is witnessing a growth in the number of national halal food players as well as partial halal product lines. In addition to demand from Muslim population, growing popularity of halal foods as a healthy option is also driving demand.”
Northwest China, which has a predominantly Muslim population, has witnessed national halal food players setting base. According to reports, Gansu province had over 10,000 small scale halal food companies in 2014, but the market is highly fragmented with only a few companies having high production value, thereby increasing the potential for large scale companies to emerge.
Chinese Halal products exporters are expected to set up a 15-strong national pavilion at the Halal Expo Dubai, to be held at the Roda Al Bustan Hotel, Dubai from September 18-19, 2017 that will widen the choice of Halal products for local importers and consumers in the UAE and the Gulf.
“We have witnessed a strong response from the Chinese manufacturers – who are taking Halal products and distribution more seriously,” Ahmed says.
Globally, Muslim expenditure on food and beverage (F&B) was estimated at US$1.12 billion in 2014 and potentially rising to US$1.58 billion in 2020. Muslim expenditure makes up 16.7 per cent of global expenditure on F&B in 2014.
Orange Fairs and Exhibition LLC, is organizing Halal Expo – an international exposition to highlight the growth in the ethical, moral and halal and healthy living, products and services.
Halal Expo – Dubai 2017 is the largest and most comprehensive Business-to-Business (B2B) halal exposition in the Middle East for the US$2.3 trillion global halal industry. The event, which attracted participation from 13 countries in its previous edition and registered 3,700 trade visitors from 40 countries, expect larger trade participation where buyers and sellers of halal products and services are expected to do brisk business.
Ahmed adds, “We are extremely delighted to welcome the Chinese Pavilion at the Halal Expo, which reflects the fact that the Halal products and services are expanding beyond the Muslim world. Chinese Pavilion will help create greater consumer awareness on the global Halal products, Halal standards and the benefits of consuming clean, green and Halal products – a trend that is fast spreading worldwide.”
Halal Expo – Dubai focusses on a number of business verticals, including, halal food, halal beverage, halal fashion, halal cosmetics and personal care products, halal travel and tourism, halal hospitality, halal banking and finance.
Halal Expo Dubai, supported by a number of government and semi-government organizations as well as the media, will be open to business visitors for sourcing products and services from September 18-19 at the Roda Al Bustan Hotel, Dubai.
More than 100 companies from 15 countries Kazakhstan, Malaysia, Indonesia, Poland, Pakistan, Switzerland, India, UK, Brunei, Philippines, South Africa, China and many more are expected to join the show.
More than 4,000 trade visitors are expected to visit the Halal Expo – Dubai, 2017, from 40 countries, while more than 100 business organizations from 13 countries are expected to showcase halal products and services.