Proposal for Development of Islamic Finance in China

As a big oil importer, China’s long-term and Muslim countries have maintained friendly cooperative relations, efforts to attract Middle East oil dollars for investment, not only conducive to China’s economic development, and also has to protect our energy security, strategic significance.  

With regard to China’s development “Islamic finance” proposal The Central Committee of Chinese Kuomintang Revolutionary Committee “Islamic finance” is based on financial activities carried out by Islamic law. According to Islam, “Islamic finance” of transaction is that all products and services are based on asset-based, meaning that all transactions must have a real purpose, such as trade financing, or railways, Or is to buy machines are based on real asset-based, rather than purely for the purpose of making money, such as “futures” of such financial derivatives, is absolutely prohibited.”

Over the last few years, international oil prices have rocketed in the Middle East nation’s oil wealth makes the rapid accumulation, triggering strong investment demand, “Islamic finance” in the global context has developed very quickly become a global financial system, an important part. In the by the U.S. sub-prime crisis evolved over the financial turmoil, “Islamic Finance” by virtue of its own characteristics, maintaining a stable development trend.

According to estimates, the current “Islamic finance” has reached a global scale, about one trillion U.S. dollars, and the estimated annual growth in more than 15%.Currently more than 70 countries around the world there are 250 Islamic mutual funds, more than 300 “Islamic finance” institutions, it holds a 550 billion U.S. dollars in assets.

Not only to gather some Muslim countries such as Malaysia, Indonesia, Bahrain, Pakistan, Saudi Arabia, United Arab Emirates and other countries is the importance of Islamic finance, a number of non-Muslim countries and regions, such as the United Kingdom, Singapore, Japan and Hong Kong, in order to enhance and strengthen the international financial center, but also to the development of “Islamic finance” as a key work, have started to change the law and regulatory system to meet the “Islamic finance” requirement, hoping to enhance the attractiveness of the oil capital.

As a big oil importer, China’s long-term and Muslim countries have maintained friendly cooperative relations, efforts to attract Middle East oil dollars for investment, not only conducive to China’s economic development, and also has to protect our energy security, strategic significance.

However, development in the Mainland of China “Islamic finance” business is quite slow, far from the Middle East oil money to invest in China to meet the demand. Therefore, we make the following recommendations to promote “Islamic finance” in China’s development:

First, establish a “Islamic finance” industry, an effective mechanism for co-operation. “Islamic finance” features of business operations, operations conducted in-depth study and actively participate in “Islamic finance” international organizations, organized the domestic financial sector to conduct trade talks with the Islamic countries and study and promote the two sides to expand their “Islamic finance” new products and facilities cooperation.

Second, try to carry out the “Islamic finance” business. China’s Muslim population, mostly concentrated in the western region, with the implementation of the western development strategy, you can take the following measures.

First, consider the western region or the establishment of “Islamic finance” institutions; the second is to allow the Western financial institutions, launched the “Islamic finance” products, in particular, Wealth management tools (such as the Islamic investment funds), to attract capital investment in the Middle East in western building; three western companies to issue abroad “Islamic bonds” or arrange Murabahah trade financing by banks and so on, are also feasible and convenient way; 4 is to encourage financial institutions to the west in the Middle East countries have set up Islamic financial windows.

Third, give full play to the Shenzhen Special Economic Zone “experimental field” role, the first to strengthen ties with “Islamic finance” institutions. Shenzhen borders Hong Kong an international financial center, in the financial personnel exchanges, and international capital and financial markets to cultivate docking with other cities on the irreplaceable advantages, is the country’s fund management center.

And Shenzhen, has a local legislative powers, you can improve the local legislation in support of “Islamic finance” development is conducive to take the lead in the introduction of “Islamic finance” institutions, to promote Shariah-compliant financial products to meet the domestic enterprises and the Middle East investors.

At present, the constraint “Islamic finance” the development of the bottleneck is the training of professionals not keep up with increased demand for speed. Develop”Islamic finance” experts, at least 10 to 20 years.

This is a comprehensive Islamic knowledge, the East-West financial theory with the new knowledge, financial ﹑ rule of law and religion in one of modern economy, and must focus on the practical ability to work. Thus, the domestic colleges and universities should be established as soon as possible “Islamic finance” professional, the United Nations financial institutions, there are plans to train professionals.

Source : Netease financial