An analysis of the strengths and weaknesses of China's Halal industry in opening up international markets
According to relevant statistics, the annual trade volume of the global Halal food and goods market has now exceeded US$2 trillion, of which the annual trade volume of Halal food reaches more than US$150 billion, yet in recent years China's Halal food exports have hovered around just US$100 million. The comparison shows, on the one hand, that China's Halal food industry has a very weak ability to compete in the international market, and on the other hand, that there is still a very large international market space for China's Halal food industry to tap.
How to quickly adapt to the development trends of the international market and integrate early into the access and certification systems of the international Halal food market, thereby enhancing the competitiveness of China's Halal food products in the international market, has become an urgent problem for China's Halal food industry, which is known as a 'sunrise industry.'
In the past two years, relevant international trade institutions and commercial departments have joined with Qinghai, Ningxia and other major Muslim-inhabited areas and main production areas of Halal food in China to hold international Halal food and Muslim goods exhibitions, attempting to thereby promote the internationalization of China's Halal food industry and bringing new opportunities for its development.
China's Halal Food Industry Expands International Markets Through International Exhibitions
Halal food, which forms its own system characterized by 'good eating, careful selection, strict hygiene, attention to nutrition, and emphasis on health care,' is closely linked with unique ethnic cultural beliefs and dietary customs. It is not only a necessity in the daily life of Muslims, but is also loved by non-Muslim consumers; people of different races and religions have higher requirements for and reliance on Halal food.
By 2007, the world's Muslim population had exceeded 1.5 billion; together with non-Muslim consumer groups, the global consumers of Halal food are no fewer than 2 billion, and the global annual consumption of Halal food exceeded US$150 billion. However, due to objective factors such as having few international brands, scattered operations, and a lack of a relatively complete certification system, China's Halal food industry has long found it difficult to participate in international market competition.
In response to this situation, on the basis of market research, relevant institutions such as the China Council for the Promotion of International Trade, the China Islamic Association and the China Food Industry Association joined with Qinghai Province to create the 'China (Qinghai) International Halal Food and Goods Exhibition,' a platform for international exchange and cooperation.
It is understood that when this exhibition was first held in 2007, it attracted enterprises from more than 20 countries including Iran and Malaysia, as well as more than 90 domestic enterprises, with actual transaction amounts at the exhibition exceeding US$190 million. The recently concluded 2008 China (Qinghai) International Halal Food and Goods Exhibition also had nearly 200 professional buyers from 16 countries and regions including Malaysia, Iran, Saudi Arabia, Indonesia and Singapore, as well as more than 300 enterprises from 20 provinces, regions and municipalities in China, and the final agreement contract funds and trade transaction volume of this exhibition reached US$213 million.
Zhang Wei, vice-chairman of the China Council for the Promotion of International Trade, said that with the help of the China (Qinghai) International Halal Food and Goods Exhibition, China's Halal food producers not only achieved immediate results in trade volume, but more importantly, through exchange and cooperation with countries leading in the Halal food industry such as Malaysia, China's Halal food producers came to realize that China has many advantages for developing the Halal industry, such as high-quality raw materials, relatively low costs and good quality; at the same time, in aspects such as technical standards, product certification, production management, processing technology and brand building, China's Halal food industry still has a relatively large gap and shortcomings compared with these countries.
Only by correctly recognizing and analyzing the strengths and weaknesses of China in developing the Halal food industry, leveraging strengths and avoiding weaknesses, relying on its own cultural and resource advantages, focusing on cultivating more well-known Halal food brands, and integrating into the access and certification systems of the international Halal food market as soon as possible through international exhibitions, can China's Halal food industry win a place in the vast international Halal food market.
Advantages of China's Halal Food Industry in Participating in International Market Competition
Information revealed at the two China (Qinghai) Halal Food and Goods Exhibitions shows that, due to the uneven economic and social development of Muslim regions around the world, the 22 member states of the Arab League and the Southeast Asian region remain the largest consumer markets for Halal food and the main export destinations for China's Halal food.
Currently, China, ASEAN and Arab countries are all in a period of rapid economic development, characterized mainly by fast development speed, rapid industrial upgrading, rapid expansion of economic scale, and a high degree of outward orientation. Against this backdrop, the economic and trade opportunities released by this huge and rapid process of change have increased sharply, providing new opportunities for China's Halal food industry to expand cooperation and exchange with these regions.
China has a Muslim population of over 20 million and a Halal food production history of more than 1,200 years; the rich Muslim traditional cultural atmosphere of the vast Muslim-inhabited areas and abundant resources, among many other favorable conditions, are the greatest advantages for China's Halal food industry to develop and open up international markets.
First, a strong atmosphere of Muslim traditional culture. Under Islamic law, Halal food refers to food permitted for consumption by Islamic law, and certain religious taboos and ethnic customs must be followed in the selection of its raw materials and in the processes of preparation, production, processing, transportation and storage. Because China's Muslim groups live in relatively concentrated areas, and benefiting from China's consistent policy of freedom of religious belief, China's Muslim regions have a strong Muslim cultural atmosphere, and China's Halal food production is easily recognized by the international market.
Second, resource advantages. The naturally pollution-free Qinghai-Tibet Plateau, Inner Mongolia grasslands, Northeast grasslands and other abundant natural pasture resources are an innate advantage for China to develop the beef and mutton industry. Because these places all produce the world's highest-quality forage, the Halal beef and mutton products and their by-products produced here can fully meet the certification requirements of international Halal food certification bodies.
Third, in recent years, with the help of the great opportunity of rapid economic development and international Halal food and goods exhibitions, China's Halal food producers have not only achieved a certain accumulation of capital, but also stimulated their awareness of actively participating in international market competition; the areas of cooperation between China's Halal food industry and Muslim countries around the world have become broader, and the forms of cooperation increasingly diversified.
Fourth, recognition of China's Halal food industry by Muslim countries in the Arab League and Southeast Asia. In the process of continuously expanding economic and trade cooperation with China, Muslim countries in the Arab League and Southeast Asia have gradually come to understand and recognize China's Halal food industry market. Pakistan's commercial counsellor in China, Shahzad Hussain Nara, said that Chinese enterprises are very welcome to invest in the beef processing industry in Pakistan, and he hopes enterprises of the two countries can cooperate to open up the international Halal food market; the Malaysian side indicated that in the near future, Malaysia will establish multiple Halal food centers in Qinghai and other places in western China to promote Halal food trade and inter-enterprise exchange between China and Malaysia.
Disadvantages of China's Halal Food Industry in Participating in International Competition
China's Halal food industry faces unprecedented opportunities to participate in international competition, and its advantages in resources, markets and other aspects are very obvious; however, it cannot be ignored that there are also quite a few adverse factors that objectively exist. Some of these problems are common problems brought by the globalized economy, while others are problems that this special industry of China's Halal food will inevitably encounter in its development.
Sha Pengcheng, president of the Xi'an Muslim Enterprise Chamber of Commerce, who has long followed and studied the Halal food industry, believes that the disadvantages hindering the internationalization of China's Halal food industry include at least the following aspects.
First, most enterprises lack long-term strategic awareness and brand awareness. The international market has very high requirements for the Halal food market, while the development of China's Halal food producers is constrained by regional economy and geographical location and influenced by traditional conservative concepts; the overall level is not high, enterprise strategic concepts are vague, most lack the courage and ability to go abroad and develop international markets, and currently there are too few brands recognized by the international market.
Second, weak competitive awareness. Most of China's Halal food enterprises are basically family businesses, with generally low levels of corporate culture and severe empiricism among operators; there is a lack of communication and healthy competition between enterprises and between enterprises and the market, still far from the requirements of participating in international market competition.
Third, capital, technology, talent and information factors cannot keep up. Because most of China's Halal food and goods producers are currently in a state of small-scale scattered production and operation, their production processes are still very non-standardized, dominated by rough processing and low-level products, with slow capital accumulation; they basically all have financing difficulties and have no time to attend to the follow-up of technology, talent and information factors. At the same time, the government's support for the Halal food industry is also insufficient.
Fourth, the international Halal food market lacks a unified standard certification system. The unified certification of Halal food is an international problem; currently, there is no unified certification system that all Muslim countries can accept, and countries generally recognize the Halal food certification standards formulated by Malaysia. China urgently needs to make a breakthrough in this regard.
Actively Participating in International Exchange and Cooperation to Resolve the Disadvantages of China's Halal Food Industry Development
China's Qinghai Province has successfully held two International Halal Food and Goods Exhibitions; in addition, Ningxia, Xinjiang and other major Muslim-inhabited areas have also held various forms of international Halal food and Muslim goods exhibitions in the past two years.
Zhang Wei believes that international Halal food and goods exhibitions have brought positive effects in helping Chinese Halal food enterprises expand foreign trade, cultivate international brand awareness, and establish a relatively complete Halal food standard certification system aligned with the international market. By holding and participating in international exhibitions and actively integrating into international exchange and cooperation, China's Halal food industry can overcome adverse factors and expand foreign trade.
Analyzing the results achieved so far, the most significant effect of the international Halal food and goods exhibitions is that they have strongly promoted the process of building a unified certification standard system for China's Halal food production industry, which will bring about a fundamental transformation of China's Halal food industry.
At the 2008 China (Qinghai) International Halal Food and Goods Exhibition, China held international Halal food certification training for the first time, inviting senior experts from international Halal product certification management agencies in Saudi Arabia, Malaysia and other countries to introduce internationally common standards as well as their countries' advanced experience and management concepts in this field to more than 200 participating Chinese enterprises. As He Zengfang, head of the Halal Food Management Department of Jinmailang Food Co., Ltd., who attended this training, said, such training gave China's Halal food industry a comprehensive understanding of the management and certification standards prevailing in the international Halal food market, and will help Chinese enterprises form unified standards in this regard.
Second, the exhibitions provided an information exchange platform for exchange and cooperation between China's Halal food producers and Muslim countries in the Arab world and Southeast Asia, not only directly driving China's Halal food exports, but also facilitating the introduction of advanced foreign management experience, technology and capital into the country; through joint ventures and cooperation with strong domestic enterprises, China's Halal enterprises can be made bigger and stronger, thereby changing the situation of small scale and few well-known brands.
Zhang Wei said that in the future, China will strive to build the International Halal Food and Goods Exhibition into an international brand, to thereby promote the participation of China's Halal food industry in international market competition and cooperation.
