Active Stocks
Thu Jul 11 2024 12:10:13
  1. Tata Steel share price
  2. 169.45 0.86%
  1. Power Grid Corporation Of India share price
  2. 343.00 -0.90%
  1. HDFC Bank share price
  2. 1,606.00 -1.25%
  1. NTPC share price
  2. 377.00 -1.21%
  1. Tata Motors share price
  2. 1,019.95 1.44%
Business News/ Opinion / Views/  In today’s China, to get rich is perilous
BackBack

In today’s China, to get rich is perilous

The Economoist

Business sectors can be praised one day and banned the next

In China, leaders' priorities can shift overnight as entrepreneurs must swiftly adjust their ambitions without hesitation. (Image: Pixabay)Premium
In China, leaders' priorities can shift overnight as entrepreneurs must swiftly adjust their ambitions without hesitation. (Image: Pixabay)

SINCE CHINA re-embraced capitalism decades ago, rich rewards have flowed to entrepreneurs who understand what the Communist Party wants. Today grasping what the party dislikes may be a more precious skill. This is an era when leaders’ priorities can change overnight. When the winds turn, entrepreneurs need to curb their ambitions without complaint.

Ningxia, a poor western region, is a good place to observe this trend. A decade ago Ningxia’s government announced plans to “go global" and “seize the commanding heights" of domestic and foreign markets for meat and dairy products that are halal, or in line with Islamic food laws. As dreams go, this was not especially fantastical. Though much of Ningxia is arid grasslands, the region is home to big dairy companies and sheep and cattle producers. Just over a third of its 7.3m-strong population are Hui Muslims, Chinese-speaking descendants of long-ago migrants from Arabia, Persia and Central Asia. Many local Hui shun pork and alcohol and eat products approved by the region’s religious-affairs bureau as qingzhen. The term is Chinese for “pure and true" and can mean both halal and Islamic (mosques are known as qingzhen temples).

Ningxia officials built a halal industrial park with room for hundreds of companies in Wuzhong, a majority-Muslim city of 1.4m people. Showing keen political instincts, officials tied these plans to the Belt and Road Initiative (BRI), Xi Jinping’s globe-spanning infrastructure scheme. The BRI was designed in part to link backwaters such as Ningxia to new markets in Eurasia. In 2015 Ningxia’s government urged firms making halal food and Islamic clothing to “firmly grasp the strategic opportunities" of the BRI by deepening ties with Muslim countries in the Middle East as well as Central and South-East Asia. That same year local officials set a target for the output of Wuzhong’s halal industrial park to hit a whopping 30bn yuan by 2020 ($4.2bn at current exchange rates).

Propaganda outlets held up Hui entrepreneurs as model workers. In 2016 the Guangming Ribao, a newspaper under the control of the party’s central committee, profiled the Yang Haji Halal Agriculture and Animal Husbandry Industrial Development Company, a producer of animal feed in the rural county of Tongxin. Its founder, Yang Jian, whose honorific “Haji" denotes a Muslim who has made a pilgrimage to Mecca, described how he guaranteed halal traceability for every sack of feed leaving his factory. The market potential was “huge", the writers reported, lamenting that so few Chinese halal firms had international brands.

Looking back, 2016 marked a high point of official enthusiasm for halal exports. That same year saw central authorities in Beijing reject calls to enshrine Islamic food rules in China’s legal code. Enacting national regulations was a long-standing request from halal-food companies, who complained that many foreign Muslim countries mistrusted products from atheist, pork-eating China.

Seemingly shutting down such debate, Mr Xi called on officials to maintain a strict separation between religion and the secular state. He also called for Islam and other foreign religions to be “sinicised". State-approved scholars warned against qingzhen fanhua (pan-halal tendencies). Over the next few years Ningxia and other provinces with large Hui communities abolished many halal regulations and made Muslim restaurants remove Arabic signs. Chinese-speaking Hui regions were mostly spared the ferocious security campaigns imposed on Turkic-speaking Uyghur Muslims in Xinjiang. Still, Ningxia saw protests when mosques were stripped of domes and minarets and given Chinese-style roofs.

Chaguan visited Ningxia recently. Arriving unannounced at the former Yang Haji halal food plant in Tongxin, he found the company merged with a Xinjiang firm, Tycoon Group, and renamed Ronghua, or Glory to China. Large red characters on a factory wall read: “Listen to the Party, Be Grateful to the Party, Follow the Party". Waiting in Mr Yang’s office for him to return from a meeting, your columnist was joined by a clutch of officials led by Liu Yan, head of the county’s propaganda department. “Were you at the mosque?" blurted out Ms Liu, for Tongxin county saw large demonstrations over mosque alterations a while ago.

When Mr Yang arrived he said that “great changes" had reshaped his business, which now focuses on domestic clients. Under Ms Liu’s steady gaze, he added that market forces guided this shift, as his expectations for exports had been too high. Ms Liu broke in. Ningxia is “actually very small", she said. With a few neighbouring areas, “we can consume all our production locally".

Bonding over deserts, not mosques

The global market for halal food is estimated to have reached $2.5trn last year. Unsurprisingly, other Ningxia entrepreneurs still dream of exports. Arab countries are an important market and Arabic people are “friends", said the owner of a halal spice and sauce business encountered at a government-run food festival in Wuzhong. For a couple of years fears of pan-halal tendencies led to stricter controls, he recalled, as one of several plain-clothes agents following Chaguan listened intently. Recently controls have eased a bit, to boost the economy and help local Hui, the business-owner suggested. He nodded at staff manning his stall, noting that they may wear white Muslim skullcaps once more.

Sadly for that entrepreneur, Ningxia has moved on. Wuzhong’s industrial park has lost its halal label, scaled back its ambitions and now focuses on high tech. Official speeches at the food festival praised delicacies from China’s “western regions" but made no mention of halal or Islamic traditions. Ningxia’s government encourages sales of irrigation systems and drought-resistant crops to the Middle East. For a Hui region, it is safe to bond with Arab customers over arid agriculture, but not over shared Muslim faith. In today’s China growth is good, but security comes first.

© 2024, The Economist Newspaper Ltd. All rights reserved. 

From The Economist, published under licence. The original content can be found on www.economist.com

 

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 09 Jul 2024, 05:31 PM IST
Next Story footLogo
Recommended For You