The Prospects of the Halal Industry in the Next 10 Years:

Perspectives on How China Can Further Play Its Role

and Strengthen Its Position

Robby Panji Kusuma1 and Dr. Mohammad Izdiyan Muttaqin2

1 Universitas Indonesia, Salemba Jakarta, 10430, Indonesia
2 Universitas Indonesia, Salemba Jakarta, 10430, Indonesia
robbypanjikusuma@outlook.com

Abstract. The global halal industry is poised for remarkable growth in the
coming decade, presenting significant opportunities for countries with
established and emerging roles. Despite having a minority Muslim population,
China is strategically positioned to become a pivotal player in this sector due to
its advanced manufacturing capabilities, expansive trade networks, and
increasing focus on halal certification standards. This study highlights the
interplay between global halal market trends and China’s socio-economic
landscape, emphasizing key drivers such as international trade policies, consumer
demand for high-quality halal products, and alignment with global halal
standards. The analysis reveals that while China’s strengths lie in its
infrastructure and production scalability, challenges persist in cultural
integration, certification credibility, and market trust. Strategic reforms in
regulatory frameworks and collaborative efforts with Muslim-majority countries
are essential to maximize China’s role in this dynamic industry. These findings
offer actionable insights for policymakers, industry leaders, and stakeholders
aiming to navigate and capitalize on the evolving global halal market.

Keywords: Halal Industry, China, Global Market, Economic Potential, Trade

Networks.

© The Author(s) 2025

I. K. Rohman et al. (eds.), Proceedings of the International Conference on Strategic and Global Studies
(ICSGS 2024), Atlantis Highlights in Social Sciences, Education and Humanities 33,
https://doi.org/10.2991/978-94-6463-646-8_16
 The Prospects of the Halal Industry in the Next 10 Years 241

1 INTRODUCTION

In the last few decades, the global halal industry has experienced remarkable
growth, becoming a significant economic sector. The global halal market spans a di-
verse array of industries, including food, cosmetics, pharmaceuticals, and tourism, with
an estimated total value of USD 2.3 trillion in 2022 and projected to reach USD 3.2
trillion by 2026 (Thamrin et al., 2022). This growth is driven not only by the increasing
Muslim population worldwide but also by the rising awareness and demand for prod-
ucts that meet halal standards. Halal products are perceived as more hygienic, ethically
produced, and of higher quality, which has led to growing interest from non-Muslim
consumers (Thamrin et al., 2022). As a result, halal markets are becoming increasingly
globalized, with significant economic implications.
China, despite having a minority Muslim population, is emerging as a key player
in this expanding global halal market. As one of the world's largest economies, China’s
growing interest in halal industries presents a unique opportunity for the country to
diversify its economy and tap into the halal sector’s vast potential (Setyaningsih, 2022).
China’s long-standing history in manufacturing and trade, combined with favorable
policies, positions the nation to enhance its role in the global halal market. However,
understanding China’s specific challenges and opportunities in developing halal indus-
tries is crucial for maximizing its potential.
This research seeks to address the need for a comprehensive analysis of China's
evolving role in the global halal industry, particularly as it is projected to play a more
significant part in the coming decade. The main objectives of this study are to: (1) iden-
tify the key factors driving the global growth of the halal industry, (2) analyze China’s
position within the global halal market, (3) assess the opportunities and challenges
China faces in developing halal industries, and (4) offer strategic recommendations to
help policymakers and stakeholders in China navigate and leverage the potential of the
halal sector. By focusing on these objectives, this study aims to contribute valuable
insights that can facilitate China’s deeper integration into the global halal market and
encourage international collaboration to accelerate its halal industry development.
To achieve these goals, the study employs a qualitative research approach, analyz-
ing academic literature, industry reports, and the latest economic data. Secondary data
sources, such as market reports, publications from international organizations, and case
studies from successful halal industry players in other countries, will provide additional
context and support the validity of the findings. Through these methods, this study aims
to offer a comprehensive overview of the halal industry’s future prospects, with a spe-
cific emphasis on China's strategic role and actionable guidance for stakeholders to
capitalize on opportunities in the decade ahead.

GLOBAL INDUSTRIAL REVIEW

Definition and Scope

In recent years, the halal industry around the world has grown rapidly and covers
industries ranging from food and beverages to cosmetics, pharmaceuticals, finance, and
tourism. The word "halal" itself comes from the Arabic, which means "allowed" or
242 R. P. Kusuma and M. I. Muttaqin

"permitted" (State of The Global Islamic Report, 2019). Halal in Islam means every-
thing permitted by the law, and haram means everything forbidden or not permitted.
Various aspects of life, such as food, drinks, medicines, cosmetics, money, and even
one's actions in business, are governed by the principle of halal. To be considered halal,
something must meet the requirements set by Sharia law. The requirements cover the
production process, the materials used, and the way they are used.
The food and beverage sector are the most important part of the halal industry. For
example, in the literature Barkan (2014), described some rules necessary for the slaugh-
ter of animal products, considered important to keep the product sterile, that such an
animal must be slaughtered by pronouncing the name of God (Bismillah) and ensuring
that the blood comes out completely from the body of the animal. During the production
and distribution process, vegetable products must also be ensured that they are not con-
taminated by illegal substances. Furthermore, all beverages that do not contain alcohol
or other harmful substances are considered halal, so in this case the scope is also wider.
For example, beverage products must be guaranteed free from alcoholic elements,
which may be derived from the fermentation process, and do not have additives that are
not permitted under Islamic law. Thus, the entire supply chain from raw materials to
finished products must be strictly monitored to ensure compliance with halal standards,
which not only relate to religious aspects but also guarantee the safety and hygiene of
the products produced.
In addition to the food and beverage industries, the cosmetics and personal care
industries have now become an important part of the halal industry. In accordance with
the Sharia law, in the literature of Setyaningsih (2022) it is explained that cosmetic
products and personal care must meet the standard of halal, which means that they must
not contain illegal substances such as alcohol or substances derived from animals that
are not slaughtered. To ensure that these products are safe and suitable for use by Mus-
lim consumers, such products must be produced and packaged in a clean and hygienic
manner. Furthermore, the halal industry also pays attention to the pharmaceutical in-
dustry, that like health products and medicines must be made, stored, and distributed
legally. It presents an additional challenge for manufacturers to ensure that each com-
ponent of their supply chain meets these strict requirements.
Sharia finance and banking are also important components of the halal sector. In
Rahim (2015), Shariah finance itself prohibits interest (flowers or percentages of the
budget), uncertainty or gambling. Financial products such as loans, investments, and
insurance are required to meet these requirements if they want to be considered legal.
Of course, this creates a unique and fast-growing market for financial services that con-
form to Islamic law. Thus, it can be said that banks and other financial institutions have
the opportunity to attract Muslim customers more massively.
Finally, in the field of halal tourism, it is also becoming an increasingly important
part of this halal industry. Halal tourism itself includes services that meet the needs of
Muslim tourists, such as halal food, places of worship, and accommodation with facil-
ities that distinguish men and women. This would enable tourist destinations to attract
more and more Muslim tourists by offering facilities and services tailored to their needs.
Moreover, with increasing global awareness of the importance of inclusiveness and di-
versity, halal tourism also contributes positively to the image of a more friendly and
 The Prospects of the Halal Industry in the Next 10 Years 243

open destination to different cultures and beliefs. Many countries now see great poten-
tial in these markets and are striving to develop infrastructure and promotions that sup-
port the concept of halal tourism, hoping to expand market share and boost the economy
through this sector.
Even though this halal industry is vast and complex, there were still challenges
associated with standardization and certification. Manufacturers and customers can feel
confused because different countries and institutions set different standards for halal
certification. However, with the Muslim population around the world continuing to in-
crease, the industry offers significant growth potential. The demand for halal products
from non-Muslim customers is also rising. Countries and companies that can meet halal
standards and take advantage of these market opportunities will be in a favorable posi-
tion in the global economy. With clear definitions and wide scope, of course in halal
industries are ready to grow rapidly in the future, providing significant economic op-
portunities for countries and companies who can meet standards and requirements.

Global Trends and Driving Factors

As one of the largest consumer groups in the world, it is estimated that there are
almost two billion Muslims worldwide. The main markets for halal industries them-
selves are countries with large Muslim populations such as Indonesia, Pakistan, India,
and countries in the Middle East.
Of course, the population growth has led to increased demand for all kinds of halal
products, from food and beverages to cosmetics and medicines. Moreover, with in-
creased incomes and purchasing power in many Muslim-majority countries, demand
for high-quality halal products has also increased. Consumers in these countries are not
only looking for products that meet high quality standards, but also for products which
comply with Sharia law. Therefore, trends like this have prompted manufacturers to
improve the quality and selection of halal products for them in the global market wide.
It is then supported by the presence of globalization, that globalization has opened
the international market for halal products. Countries such as Malaysia and Indonesia,
have become centers of production and export of halal products thanks to globalization
as well as the modernization of technology that enables mass production and delivery
of halal to the world. Today, halal products can also be bought in supermarkets, restau-
rants, and online stores in various countries, including in Muslim minority areas such
as Europe, North America, and East Asia, due to the ease of transportation and interna-
tional trade. In addition to globalization, non-Muslim consumers are becoming more
aware and in need of halal products because they believe that products with halal labels
are more hygienic, healthy, and ethical because of the standards applied in their pro-
duction processes. It then sparked wider global market attention.
Furthermore, many governments around the world have recognized the economic
potential of halal industries and provided support for infrastructure, certification, and
regulation. Malaysia, for example, has an internationally recognized halal certification
body and actively promotes the export of halal goods. Similarly, countries in the Middle
East such as Saudi Arabia and the United Arab Emirates continue to implement policies
that support their position as a hub of halal distribution. This is then supported by the
development of innovation and technology.
244 R. P. Kusuma and M. I. Muttaqin

New technologies in production, packaging, and distribution have enabled manu-

facturers to meet halal standards more effectively and efficiently. One example in Ah-
ram's literature, et al (2017), is the presence of blockchain technology, which guaran-
tees authenticity and transparency in the halal product supply chain. As a result, con-
sumers now have more choice due to growing innovations in halal products such as
ready-made food, cosmetics, pharmaceutical products, etc., as well as in the growing
tourism sector with more and more Muslim-friendly destinations, such as halal food,
worship facilities, to suitable accommodation.
Finally, the industry is also seriously supported by a halal certification that ensures
consumers that the products they consume meet the halal standards. This certification
is assessed to increase consumer confidence and help manufacturers enter the global
market. Countries like Malaysia, Indonesia, and Turkey have become leaders in halal
certification, and their certification bodies are internationally recognized. Overall, the
global trend in the halal industry shows a very positive prospect of growth, that with
government support, increased demand from Muslim and non-Muslim customers, tech-
nological advances, and the development of the non-food sector. Thus, companies and
nations that can take advantage of these trends will have a strong chance to take ad-
vantage.

ANALYSIS OF CHINA'S ROLE IN HALAL INDUSTRY

According to the Council on Foreign Relations (2020), Islam ranks seventh on the
list of religions in China. Muslims are only a minority, about 22 million or 1.8% of the
total population of China. The country has diverse Muslim communities of ethnic
groups such as Hui, Uighur, Kazakh, Dongxiang, Salar, and others. Areas like Xinjiang,
Ningxia, Gansu, and Qinghai, are provinces with a large Muslim population. They have
strong halal traditions and practices. In major cities such as Beijing, Shanghai, and
Guangzhou, Muslims are also judged to play a major role in the local economy, includ-
ing in the culinary and trade fields.
China itself has shown interest in building halal industries as part of a broader eco-
nomic plan in recent years. So, in order to support this progress, there are a number of
steps being undertaken like a halal industrial center to the extent of international coop-
eration, they are:
1. Halal Industrial Center
Several parts of China, especially Ningxia and Xinjiang, which have a
relatively large Muslim population, have sought to become centers of halal
industry. To attract investment in halal industries, local governments have in-
itiated incentives such as tax evasion, technical assistance, and infrastructure
development. This special economic zone was established to support that fo-
cus on making and distributing halal goods, making these areas a strategic
production hub.
2. International Cooperation
China is also actively working with Muslim countries to promote trade in
halal products, for example with Indonesia and Malaysia. The cooperation also
includes bilateral trade agreements as well as participation in international ex-
hibitions and conferences focused on the halal industry. By strengthening
 The Prospects of the Halal Industry in the Next 10 Years 245

these ties, China hopes to increase exports of halal products and attract more
foreign investment.
3. Halal Certification
As is well known, that halal certification is an important component in
ensuring that the goods manufactured meet recognized halal standards. Alt-
hough at present China does not have an integrated national standard for halal
certification. Any business there can register with a local Islamic organization
based on local standards. In addition, those wishing to engage in the produc-
tion and sale of halal foods in China's domestic market need to apply for a
Halal Food Permit from the local tribal and religious bureau, while the local
halal food management office will be responsible for verifying whether the
applicant meets the relevant qualifications. Again, there are no international
regulations on this, although the qualifications and procedures for obtaining
legal food licenses are regulated by various regional regulations.
Increased awareness and demand for halal products, as well as the need to improve
the quality of life and food security among the people, have affected the growth of halal
industry in the country:
1. Development of Halal Industry
China has developed extensive and diverse halal industries, including
food, beverages, cosmetics, pharmaceuticals, finance, and tourism. The Chi-
nese government has taken steps to boost the development of halal industry,
such as the creation of Halal Industrial Zones and halal zones in existing in-
dustrial areas.
2. Global Halal Market
Reviewed by the State of the Global Islamic Report (2019), the global
halal market is currently able to absorb about 16.7% of the entire global food
industry. China, as the largest economy in the world, has huge potential to
increase global market share in the halal industry.
3. Engagement in the Global Halal Industry
China has become one of the countries active in the global halal industry.
It has participated in various events and initiatives related to the halal industry,
such as the State of the Global Islamic Economy in 2020.
4. Technology and Logistics Development
China has stepped up its technological and logistical development to im-
prove the quality of life and food security amongst the people. These advances
in technology and logistics have helped improve the efficiency and quality of
halal products in China.

Halal Industry Prospects for the Next 10 Years for China

The imports of the Organization of Islamic Cooperation countries recorded $279
billion by 2020. Dominated by halal food at 72%. A report that counts the ranking index
of 81 (eighty-one) of the country records a significant Indonesian movement on halal
food, followed by pharmaceuticals and cosmetics, and fashion. The majority or about
66.4% of the investment is invested in the Shariah financial sector. Followed by halal
foods of 15.5%, pharmacies of 8%, average 5%, and travel of 4.9%. Dinar Standard
246 R. P. Kusuma and M. I. Muttaqin

projected with an average growth of 7.5% per year, consumption in the global sharia
economy could reach US$2.8 trillion by 2025. On the investment side in the Sharia
sector, there was a significant increase of 118% (yoy) to $25.7 billion. Meanwhile, the
biggest contribution of the real sector consumption came from halal food at $1.67 tril-
lion, up 7.1%. Followed by modest fashion at $375 billion that grew at 6.1%, media
and recreation at $308 billion or 7.5%. (State of the Global Islamic Economy Report,
2022).
China plays a significant role in infrastructure and investment in the global halal
industry. The country is not only acting as a major producer of halal products but also
active in investment and development of infrastructure related to this industry. China's
participation in the halal industry was driven by several factors, including the growth
of the domestic Muslim population, the Belt and Road initiative, and the growing in-
ternational demand for high-quality halal products. China has shown a strong commit-
ment to being a leading player in the global halal industry. Over the next 10 (ten) years,
the halal industry prospects for China are very promising, mainly due to increased
global demand for halal products and massive investments in infrastructure and tech-
nology. This analysis explores the opportunities and challenges China may face in de-
veloping and expanding the halal sector over the next decade. China has the potential
not only to expand its domestic market for halal products, but also to strengthen its
position as a major distribution center for halal product in Asia and the world.
The global Muslim population is expected to continue to grow, with an estimated
2.2 billion by 2030. This growth will increase demand for halal products, not only food
and beverages but also other products such as cosmetics, pharmaceuticals, and Shariah
financial services. Awareness of the benefits of halal products among non-Muslims is
also rising, especially because these products are often considered more hygienic, eth-
ical, and healthy.
With the Belt and Road (BRI) initiative, China has a great opportunity to expand
its range of halal products to new markets in Asia, Africa, and Europe. Investments in
transportation and logistics infrastructure will facilitate access to these markets, poten-
tially boosting China's exports of illegal products significantly. China will continue to
strengthen partnerships with Muslim-majority countries to boost trade and investment
in the halal sector. This cooperation includes technology transfer, the construction of
production facilities, and the establishment of more efficient distribution networks. The
use of digital technologies such as e-commerce and mobile applications to market and
distribute halal products will increase. This will make it easier for consumers around
the world to access Chinese halal products, boosting sales and market penetration.

China's Potential Role and Strength

China's potential for a role in the halal industry is enormous, given the country's
ability to integrate advanced technology into production and distribution processes, as
well as expertise in large-scale manufacturing that can suppress production costs. Chi-
na's strength in this industry is also supported by its capacity to take advantage of its
vast domestic market, which is potentially one of the largest halal markets in the world.
Moreover, with its main ports and sophisticated logistical infrastructure, China has the
 The Prospects of the Halal Industry in the Next 10 Years 247

capacity to become a global distribution center for halal products. China's potential role
and strength in this sector marks a bright future for the halal industry.
Over the next 10 (ten) years, China’s halal industry prospects are very promising,
mainly due to increased global demand for halal products and large investments in in-
frastructure and technology. This growth is also driven by technological developments
in the production and distribution of halal products, which enable China to meet inter-
national quality standards and maintain global consumer confidence. China's potential
role will be stronger with international collaboration that expands market reach and
ensures compliance with legal regulations across countries.
China has the potential not only to expand its domestic market for halal products,
but also to strengthen its position as a major distribution center for halal product in Asia
and the world. China’s success in facing these challenges will depend heavily on its
ability to continuously improve product quality, strengthen international cooperation,
and adapt to changing trends and regulations in the global halal industry. With sustained
investment in research and development, as well as commitment to international halal
standards, China is projected to increase its influence in this industry, making a signif-
icant contribution to inclusive and sustained global economic growth. China's potential
role and strength in this sector marks a bright future for the halal industry, with the
prospect of playing a leading role in providing safe and quality halal products to global
consumers.

Challenges and Risks

Despite its huge potential, China also faces a number of challenges and risks in its
efforts to develop a halal industry. One of the major challenges is global consumer
confidence in halal products produced in China. Although China has worked hard to
improve halal quality standards and certification, perceptions of quality control and au-
thenticity of Chinese halal products remain a major barrier in the international market.
One of the biggest risks to China is the possibility of reputation problems if the
halal products produced do not meet the expectations or strict halal standards. Issues
related to product authenticity and safety can undermine consumer confidence and af-
fect global demand. Furthermore, a large dependency on international markets can
make China vulnerable to global economic fluctuations and trade policy changes in
partner countries.
To address these challenges, China needs to increase its investment in the devel-
opment of technology and infrastructure that enables more effective quality and authen-
ticity monitoring of halal products. In addition, China also needs to strengthen its co-
operation with other countries to improve the globally accepted standard of quality and
halal certification. Thus, China can boost global consumer confidence and enhance its
industrial potential.

CONCLUSION
China has demonstrated its growing influence and strategic role in the global halal
industry. Major corporations like H&M and Zara have expanded their operations to tap
into China's halal market, while local enterprises such as COFCO have emerged as key
248 R. P. Kusuma and M. I. Muttaqin

players in halal food exports. These developments highlight China's ability to meet in-
creasing global demand for halal-certified goods. Similarly, in the pharmaceutical sec-
tor, companies such as Sinopharm are developing halal products that comply with Sha-
ria standards, bolstering China's reputation as a significant contributor to this industry.
Furthermore, China's efforts in halal tourism, with cities like Xi’an and Shanghai be-
coming popular destinations, underline its commitment to diversifying its halal market
portfolio and catering to Muslim travelers.

Summary of Key Findings

This study identifies China's dual role as both a major producer and a strategic
investor in the global halal industry. Several factors drive this engagement, including
the growing domestic Muslim population, the Belt and Road Initiative (BRI), and the
surging global demand for halal products. Over the next decade, the prospects for Chi-
na's halal industry are highly promising due to sustained investments in infrastructure,
technology, and international partnerships. However, challenges persist, particularly in
ensuring robust quality control and gaining broader international trust in its halal certi-
fication standards.

Practical Implications
For policymakers, this research emphasizes the importance of fostering partner-
ships with Muslim-majority countries to strengthen trade and investment in halal sec-
tors. Initiatives such as technology transfer, joint ventures in production facilities, and
establishing efficient distribution networks are crucial for advancing China's position
in the global market. For businesses, leveraging digital platforms like e-commerce and
mobile applications offers substantial opportunities to market halal products more ef-
fectively and reach a broader audience. Finally, for consumers, China's active role in
halal markets means greater access to diverse, high-quality halal-certified goods,
though concerns about quality assurance and authenticity remain areas for improve-
ment.

Recommendations for Future Research

Future research should explore several areas to enhance understanding of China's
role in the global halal industry. First, a detailed analysis of consumer perceptions and
trust toward Chinese halal certification systems could provide actionable insights for
improving market acceptance. Second, examining the long-term impacts of the BRI on
the halal industry's global supply chains would yield valuable strategic guidance for
policymakers and businesses. Lastly, investigating the integration of emerging technol-
ogies, such as blockchain for halal certification and artificial intelligence in logistics,
could shed light on how digital transformation can revolutionize the sector. By address-
ing these gaps, future studies can build on the foundation laid by this research, contrib-
uting to a more comprehensive understanding of the global halal industry's evolution
and China’s role within it.
 The Prospects of the Halal Industry in the Next 10 Years 249

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