China’s halal food

With a considerable native Muslim population, in particular in the West China region, Halal food has always been part of Chinese cuisine. Halal restaurants can be found in cities all over China. Look at this entertaining video on hand pulled noodles.

Other dishes from China’s Western region that are now available nationwide include; cooked mutton (shouzhua yangrou), mutton buns (yangrou paomo) and shaslik (yangrouchuan).

Many Chinese manufacturers of food ingredients are actively advertising their products as Halal certified, as is shown by this photo taken during the influential Food Ingredients China trade fair.

HalalExh

Halal food manufacturers in Northwest China want to become household names around the world. Eager for the economic rewards that breaking into the global market of 1.6 billion Muslims will bring, these firms want to be trusted by Muslim consumers around the world, especially in the holy city of Mecca. According to Wang Guoliang, Deputy Secretary General of China Islamic Association, the global halal sector is expected to reach US$ 6.4 trillion in 2018.

China should have the ability to become a major halal player. While the country is a net food importer, it’s competitive in niche food markets. In the late 2000s, China was the fastest-growing exporter of kosher products in the world. With more than 500 kosher-certified factories around China, fully half of China’s food exports to the United States, the world’s largest kosher market, are kosher. It is a remarkable accomplishment given that China has no indigenous Jewish communities. But China has a flourishing domestic halal industry of its own, valued at USD 20 billion, to serve its own Muslims, of whom there are about 23 mln.

National Standard

Chinese Muslims have become more vocative about lack of respect for Halal regulations. In Xi’an (Shaanxi), Muslim residents took to the streets in 2015 to protest the sale of alcohol in Halal restaurants. In Xining (Qinghai) a riot erupted in the same year after residents discovered pork products inside a halal bakery’s delivery van. During the Party Congress of March 2016, delegates from Muslim regions called for a National Standard (Guobiao) for Halal food.

Ningxia

Zhang Hongyi is an ambitious man. As the general manager of the Jingyitai Halal Food Company, located in Northwest China’s Ningxia Hui Autonomous Region, Zhang has plans to build a halal food factory in Dubai in the United Arab Emirates (UAE). If his plans are a success, Jingyitai would become the first Chinese halal food manufacturer to make a direct investment in an Arab country. According to Zhang Hongyi, “Mecca is the center of the Muslim world, if we can tap into the market in Mecca, we would become trusted by Muslims all across the world, making it easier to enter other Muslim markets.”

Jinyitai Logo

 

China has a Muslim population of 23 mln, a tiny fraction of the 1.6 billion Muslims living around the world. With the support of the local authorities, halal food manufacturers in Ningxia have started to eye the world’s growing market for halal food and are eager to expand their businesses overseas to reach this potentially huge market.

Another Ningxia-based company, Bofeng Beef Group, has established a subsidiary, Bogong Halal Food Co. Ltd., with a capacity to process 100,000 cows p.a. into halal beef products, in 2015.

An example of a non-Muslim Han Entrepreneur moving into Halal beverages is Sun He, the manager of Qiye Qing (Wuzhong, Ningxia), a company that turns Ningxia’s iconic gouji berries, known in traditional Chinese medicine for their health benefits, into a cloudy orange-colored bottled beverage. The drink is certified halal under Chinese certification, meaning it contains zero percent alcohol — a surprisingly difficult technological achievement for factory-processed juices, which usually contain alcohol in trace amounts. The manager, Mr. He Jun, believes this move is a great opportunity to cash in on the Middle Eastern and Central Asian markets. The picture shows an ad of this beverage. The ingredients as listed on the label are:

Purified water, fresh goji juice, sugar, citric acid, goji honey.

Qiyeqing

However, how to gain acceptance from Muslim nations for halal food made in China is a major problem. Observers have said that China’s halal food manufacturers, who are mostly small- or medium-sized enterprises, face many difficulties in overcoming ideological and economic barriers to this kind of international trade.

Gansu

Gansu province is also the home of a considerable Muslim population. A Chinese-Malaysian halal food laboratory has been officially set up in that region in 2015. China’s Ministry of Science and Technology has launched a halal food programme with Malaysia, under which Gansu Province will lead its implementation, giving full play to the province’s strength in Muslim culture, science and technology, location, trade, industry and other aspects. Gansu will work closely with the Malaysian side in halal food processing and biological material research and certification in order to build an international-level halal food testing laboratory. With the laboratory construction seen as the turning point, Gansu will lead the establishment of China’s halal food industry technology innovation alliance, to build a platform for technical co-operation between China and Muslim countries.

It is peculiar to note that these innovative programs in the field of Halal food in China are concentrated in Ningxia and Gansu and not so much in Xinjiang, which has China’s largest Muslim community.

Influence in the capital

Beijing is known for its wide range of local snacks. Many have been introduced by migrants from other regions settling down in the capital. One group became a major if unexpected influence on what Beijingers ate: the Muslim community, mainly Uygurs from Xinjiang who had traveled to the capital along the Silk Road with other merchants of West Asian origin. Muslims have a long history in Beijing. Uygur chefs brought their food with them because they couldn’t eat at non-Muslim restaurants. Soon, they established their own eateries – the famous mutton hotpot restaurants like Donglaishun. Their snack shops offered a variety of fried and baked pastries. Many adopted local ingredients and flavors, and again, over time, they became part of the city’s epicurean traditions.

No national household names

Beijing hopes to create national champions out of the hundreds of Chinese halal food companies already in operation. The industry is highly decentralized, with local companies, mostly without nationally recognized brands, serving pockets of Muslims thinly dispersed across the vast country. China lacks national halal standards – most certification occurs on the local or provincial level – and obtaining internationally recognised halal certification has posed a challenge. Malaysian halal certification is the gold standard, but globally, halal certification is still a new phenomenon. Many Muslim-majority Middle Eastern countries, such as Saudi Arabia, have poorly developed industrial sectors, and many halal consumers continue to rely on locally made products that they recognise and trust.

For Chinese halal food manufacturers looking to expand their businesses, going abroad has become a necessity. According to Li Ziran, the director of the Institute of the Halal Industry at Ningxia University, most halal food companies in China supply only the local market. Their scale is limited.

According to statistics issued by the State Ethnic Affairs Commission, 97.3% of the 2,400 cities and counties in China surveyed have halal food industries, but the structure of the industry is atomized, lacking nationwide household names and leading companies.

The halal food market in Ningxia is typical of this trend. Statistics issued by Ningxia’s Bureau of Commerce show that there are 192 halal food manufacturers in Yinchuan, most of which have fewer than 100 employees. The majority of halal food manufacturers in Ningxia need to modernize their production facilities to be able to compete with Muslim food companies in other parts of the world, but cannot afford to do so.

Zhang Hongyi realised that this was necessary and in 2009 he transformed his company from a traditional pastry maker into a comprehensive halal food company that provides staple foods as well as frozen products. The introduction of new technologies was key to this transformation, and since 2010 Zhang has cooperated with the China Agricultural University (Beijing) on research into methods to prolong the shelf life of frozen noodles, dumplings and rice while maintaining their flavour.

Distrust and doubt

Analysts have said that the cultural differences between Chinese Muslims and Muslims from other countries, caused by many years of isolation, including ritual and customary differences, might make it harder for Chinese halal food manufacturers to be seen as “authentic.”

Ideological differences between the Chinese government and the Muslim world is another hurdle that Chinese companies that wish to sell food in Muslim countries have to get over. According to Zhang Hongyi: “The truth is that China is a non-Muslim country and its ruling party promotes atheism. Despite our assurances that we are a Muslim company and that we closely follow the doctrines of the Koran during our manufacturing process, [foreigners] distrust us and doubt our piety.”

However, the difficulty of adapting your product to a different kind of customer is still one of the largest problems for companies which expand abroad, halal or not. One halal food manufacturer that attempted to go abroad, Hongshanhe, produces chillies and hotpot ingredients in Wuzhong, and started to sell their products in Malaysia last year. But his attempts have not been met with much success.

HSHlogo

“How to localize the food to cater to the tastes and consumption habits of the local customers was our main task,” Ma Zhanjiang, owner of the Hongshanhe, told the Global Times.

Wuzhong has 726,000 Muslims, 53% of the city’s total population. The city is planning to build China’s biggest domestic and international industrial zone for buying, processing and selling halal products.

The road to Mecca

Mecca has become the market of choice for Chinese halal food manufacturers looking to expand abroad.

Wang Guoqiang, author of the book The Halal Industry and Certification, agreed with Zhang and said that an effective way for Chinese halal food companies to open up the worldwide Muslim food market to their goods would be to gain recognition and be purchased by the Saudi Arabian government.

Every year, the Saudi Ministry of Hajj buys food and gives to pilgrims coming to the country. If a Chinese brand could become part of this, then they could gain the trust of Muslims around the world.

Last year, over 4 mln Muslim people gathered in Saudi Arabia to celebrate the Eid al-Fitr holidays. Of the pilgrims, most of the were from Pakistan, Turkey and Egypt, as well as around 12,000 Chinese Muslims.

Each year, billions of dollars are spent in Mecca during the Eid al-Fitr holidays, according to statistics issued by the Saudi Arabian Chamber of Commerce.

Saudi Arabia, a wealthy nation with little agricultural resources, needs foreign companies to supply food for the people that come to its cities on pilgrimage.

But, it remains very difficult for Chinese firms to enter this market. Despite China being known as the world’s factory, its halal food exports only make up 0.1% of the world’s halal food market, according to statistics issued by the China Council For the Promotion of International Trade.

The lack of a nationwide halal food certification system, similar to what other Muslim countries have, has become a major hurdle for Chinese halal food companies looking to go global.

Most Muslim countries have had a sound certification system for halal food since the 1970s, and most Muslim countries recognize each other’s certification standards, while China has yet to lay out a nationwide halal food certification system.

Ningxia established China’s first halal food certification centre – the Ningxia Halal Food International Trade Certification Centre in 2009. As of this month, the centre has offered certification to over 100 companies and established a mutual recognition of halal food standards with seven countries, including Malaysia, Saudi Arabia and Egypt.

Help to jump hurdles

“Some countries have used the certification system as a trade barrier to prevented Chinese companies entering their markets,” Ma Bing, director of the Ningxia certification centre, told the Global Times. The authorities in Australia have allowed local social organizations and certification companies to control the criteria for halal certification, which has made it more difficult for Chinese companies to know who to go to for certification, Ma said.

Sometimes, despite inter-governmental recognition of halal standards, civil groups still reject Chinese halal foods.

CnHalalCert

To help overcome these barriers, the authorities in Yinchuan have introduced measures to help its halal food manufacturers go global. In addition to setting up the Desheng Industrial Zone, which aims to be the centre of Islamic industries in Ningxia, it has launched preferential policies such as tax breaks for halal food manufacturers looking to expand abroad.

Zhang Hongyi’s plan is in line with President Xi Jinping’s “One Belt and One Road” development strategy that aims to encourage Chinese companies to expand abroad, especially into central and western parts of Eurasia.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975.

 

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China’s breakfast revolution

Introduction

The meal that most people find hardest to change is breakfast. Most people are willing to experiment with different foods during lunch or dinner, but when you are still waking up, you prefer to do so with those familiar breakfast items. The following video gives a good impression of a traditional Chinese breakfast.

However, diets in China, including breakfast, are moving to incorporate more western-style foods, driven by economic growth, urbanization, and market liberation. Yet, few studies use microeconomic data to identify the factors driving the trends, particularly to link the rapidly changing demographics to specific western-style foods. Research jointly conducted by the Chinese Academy of Sciences, Washington State University, North Dakota State University, University of Florida, and Economic Research Service at USDA used household-level data that were collected in Beijing, Nanjing, and Chengdu in recent years to provide new insights on this issue.

The data were collected through a week-long food diary approach, asking the selected households to record all the detailed food consumption by meals (breakfast, lunch, and dinner), including each ingredient prepared or eaten in the meal, no matter the meal occurred at home or away from home. The tracked food items includes each item’s name, price, purchase venue, and amount consumed for that meal, which allow us easily to identify and distinguish the western-style items from traditional Chinese diets. A full list of western style breakfasts and the observed frequency for each item are presented in Table 1.

Table 1 Observed Western style breakfast items

Tab1

Western-style Foods Have Gained Significant Popularity

Most of Western-style breakfast menu items can be found on Chinese dining tables for breakfast, and they have become increasingly popular in urban areas. In Table 1, all observed western breakfasts are grouped into three categories, including bread and cake, milk, and other western foods. Each category further includes several kinds of specific western foods. Clearly, 83% of surveyed households consumed at least one kind of the listed food in Table 1 during the survey week. Of which, fluid cow milk is the most popular, with 564 households reported consumption, accounting for over 70% of the entire sample. Following fluid cow milk are the bread and cake categories, with 47.3% and 16.1% of surveyed households reported consumption, respectively. Although less frequently consumed, it is notable that sausage, cheese, and coffee, three very western items, have been incorporated in Chinese breakfast menus.

Urban households more frequently incorporate the western-style foods in breakfast as income rises

Table 2 Frequency of the Western Foods to Be Consumed In Breakfast in the Survey Week

Tab2

On average, there were about four breakfasts out of seven (in the survey week) where at least one kind of western food was consumed for each household. Income, as expected, has a significantly positive effect. The number of breakfasts included at least one kind of western-style food is 3.83 for the lowest income group, while it increases to 4.63 for the highest income group. Similar trends can be found for bread, milk, and other western foods consumption in terms of meal number. For bread, the weekly consumption frequency for the highest income group is 2.42 breakfasts, which is one breakfast more than that for the lowest income group.

The positive income effect can also be seen in terms of per capita consumption (Figure 1).

Fig1

Fig. 1: Per Capita Consumption of the Western-Style Foods in Survey Week

Women in command

Women (mothers) play an important role in deciding the ingredients on a Chinese breakfast table.The western food consumption varies by demographics, including the characteristics of the female head of household (FHH). In Figure 2, we can see that families with wives who hold college or advanced degrees more frequently incorporate western foods in breakfast than other families. It is also the case for per capita western food consumption, with 1.26kg for families with a highly-educated FHH versus 0.98kg for others.

Fig2

Fig. 2: Wife’s Education Effect on the Western-Food Choice Is Positive

Younger Generations leading the Westernization of Chinese Breakfast

Family composition also matters, but the effect differs across food types. For instance, families with children tend to consume more bread at breakfast than other families, but the difference is not that remarkable for milk and other western foods. Also, families with adolescents or young adults more frequently consume bread at breakfast than their counterparts, but families with seniors consume bread less frequently, but more frequently consume other western food products. Families with dual-career parents do not present consistent differences from single-career families.

Table 3 Effects of Family Composition on the Western Food Consumption

Table2

Regional Effects Are Significant

Western food consumption differs remarkably across cities. Beijing is leading in consuming western foods in terms of the number of breakfasts consuming western foods. On average, there are 4.42 breakfasts including at least one type of western-style food, which leads Chengdu by 0.42 breakfast meals and Nanjing by 1.23. Similar comparisons can be found if we focus on bread, milk, and other western foods. In terms of consumption quantity, however, Chengdu takes over the leading position with per person consumption of1.53kg, nearly double the level of Beijing (0.85kg) and Nanjing (0.79kg). It is noted that the differences across cities may not exactly reflect the regional difference as these surveys in three cities were not conducted at the same time.

Fig3

Figure 3: Western Food Consumption by City

Entrepreneurial activities

A number of companies have already started cashing in the above mentioned trends by launching foods and beverages specifically formulated for breakfast. Several dairy companies have launched breakfast milk, like Yili’s Oat Milk introduced in an earlier post. In my post on public nutrition in China, I selected a fortified bread from Oishi that is also marketed as a breakfast food. The common element in all these products is: get all the nutrients you need from one single sip or bite.

Conclusions

The western-style foods, in particular bread and milk, have gained popularity in China and become an important part of urban Chinese breakfasts. In the future, with further income growth, the demand for the western foods will continue to grow remarkably. This finding has important implications for agricultural production and food processing industry. Since making bread requires higher protein wheat flour relative to making noodles, fried dough (youtiao), and steamed buns (mantou). The increasing demand for bread herein is challenging China’s wheat breeding and high-protein wheat production. A potential to rely on imports might be a solution considering China’s limited land for high-protein wheat production such as hard red winter and hard red spring, and its relatively logged wheat breeding technologies.

Regarding milk, it is well known that the recent milk safety incidents such as melamine-contaminated baby formula have terribly damaged consumers’ confidence in consuming domestic produced milk and shocked milk production in China. The fact that Chinese consumers are demanding more milk with the growing income and health desire, however, is unchanged according to our findings from this study. Therefore, how to supply sufficient and safe milk becomes a critical question for policymakers and milk industry to pay enough attention. The western-style food consumption is also significantly related the female head of household’s education achievement and family composition. Particularly, the researchers found that younger generations in urban household are leading the trend for westernization of Chinese breakfasts. Since people often formed their food preferences at young and will stick on when aging, the findings thereby suggests that western-style foods will be included in all age groups in the foreseeable future. Meanwhile, the FHH’s education is found to have a significantly positive effect on western food consumption, both in frequency and in consumption level. This result suggests that any effort to promote western-style foods in China’s market can increase returns by targeting the FHH.

The other direction: the sophistication of traditional Chinese breakfast

Against the background of growing nationalism in China, it will be no surprise that the opposite of the westernisation of Chinese breakfast, the sophistication of traditional breakfast foods, can also be observed. A good example is a recently opened fast-food outlet of the famous Goubuli Baozi (steamed fill buns) restaurant in Beijing. Apart from its steamed buns, the menu also features typical breakfast items like jianbing and doufunao.

Jianbing resemble French crêpes and are sold on almost every corner of the street in Beijing during breakfast time. The ones sold in Goubuli include Peking duck jianbing cooked with cucumber, sliced Peking duck, pickles and the sweet paste of flour. Three other varieties of jianbing are available: traditional Tianjin-style; bacon; and seafood. The pictures compare a jianbing as sold by street vendors and Goubuli’s Peking Duck jianbing.

JB-street     JB-GBL

Doufunao literally means bean curd brains and is made of soft silken bean curd with sauces and garnishes usually served sweet in southern China, and salty in northern China. At Goubuli it is topped with crumbs of mahua (fried dough twist, Tianjin’s most famous snack), rousong (meat floss), and furu (fermented bean curd). This combination makes each spoonful of doufunao tasty and complex thanks to the savory furu and soybean paste, crispy mahua, and silken bean curd.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975.