Ningxia Hui Autonomous Region is advised to establish an Islamic Financial Center in the next five to ten years, according to a scholar from the National Development and Reform Commission.

Some experts hold that economic and trade activities with enterprises from Arabian countries cannot be preceded with the absence of their financial institutions in the local market place.

Ningxia Bank has conducted the pilot program of Islamic bank business for three years, according to Lu Fang, board chairman of Ningxia Bank. However, those business items are just confined in the domestic scope, Lu added.

The Academic Office of National Development and Reform Commission and Ningxia Commerce Department have jointly conducted academic research on the feasibility of establishing an Islamic Financial Center in Ningxia. Zhang Yansheng, secretary-general of the academic committee of the National Development and Reform Commission, released the outcomes of the research in July earlier this year and stated that Ningxia should gradually build up an internationalized Islamic Financial Center within the next 5 to 10 years as to facilitate financial cooperation between China and Arab States.

Zhang holds that the current bank system in China-with interest rates being the level to balance out capital supply and demand-is an impediment for realizing economic cooperation between China and Arab States.

Zhang emphasized that the setting up of this Islamic Financial Center will surely attract investment from Arab States in Ningxia and China’s overall western region.