China has been urged to consider introducing Islamic banking practices to boost trade with the Arab and Muslim world.
“Most of the money in Islamic banking comes from Gulf countries and these oil-rich countries prefer Islamic banking tools, so for China to invest in this regard, there is big potential for growth and business,” said Wajdi Makhamreh, CEO of the Amman-based Noor Investments brokerage.
“There is a dire need for networking between Chinese banks and their counterparts in Arab and Muslim banks to cooperate in introducing Islamic banking tools,” Makhamreh told Xinhua.
Faeq Hjazin, economist and expert in the Islamic banking sector, said: “If Chinese banks and investors consider introducing Islamic banking tools, they will help boost their country’s commercial exchange with the Arab and Muslim world at a faster pace.”
The experts said China could play a larger role in the region and increase its involvement in mega projects in the Arab and Muslim world once it started providing Islamic banking products.
Fouad M. Alaeddin, Middle East Managing Partner and Head of Markets at Pricewaterhousecoopers, said the potential for growth in the sector was huge.
The experts said the return on investment in the Islamic banking sector was sustainable and lucrative as the sector was less risky than conventional banking.
“Islamic banks rely on genuine collaterals. They do not rely on debt, and they do not deal with hedge funds and derivatives and other toxic financial instruments that caused the global financial crisis,” Makhamreh said.
“This is the reason they were the least to be affected,” he said.
Hjazin said China would benefit from thinking about Islamic banking styles as these were preferred by over one billion Muslims across the world.
source : china gate