Business / Economy

Ningxia seeks to spur Arab trade

By Wang Huazhong and Qiu Bo (China Daily) Updated: 2014-03-18 07:35

Top 10 trading partners of the Chinese mainland

"Financial cooperation will elevate the quality of our trade, boost bilateral investment and provide mutual value." He added that his proposed moves can drive Ningxia, an inland region, to open up fully, as well as creating more financial support for local and traditional industries.

About 35 percent of the Ningxia population is of the Hui ethnic group, which has many affinities with Arab nations. Those similarities are of benefit in communication.

Yuan Jinlin, a senior official with Ningxia's reform and development commission, said that the inland region lags behind its counterparts - not only because it has a less developed economic foundation but also fewer ways to open up to the world.

In recent years, many State- and regional-level forums and fairs, such as the China-Arab States Expo, have been held in Ningxia.

In 2009, Ningxia gained approval to be one of the first areas in the nation to operate Islamic banking services.

Lu Zhengwei, chief economist of Industrial Bank Co, believes that as China is seeking to strengthen its bonds with the Arab world and develop its own western regions, Ningxia could play an important role.

But it should be noted that Islamic banking (Sharia-compliant finance) has unique characteristics that forbid interest. Rather, profits must be derived from service fees and dividends, he said.

Zhao Lei, a professor from the CPC Central Committee Party School, said that 45 to 60 percent of trade transactions around the world are generated between regional organizations, which suggests Ma's proposals have bright prospects.

He advised that Ningxia should take full account of demand and resource complementarities between the partners.

Also, he warned that "not every country from the Arab world is suitable for establishing cooperation."