| Summary: | China’s commercial and geostrategic interests increasingly deepen its trade and investment in
Muslim countries throughout the world. In terms of compliance with local law, many Muslim
countries feature mixed or hybrid legal systems, including common law, civil law, and sharia.
Chinese enterprises have little experience with sharia compliance and Islamic finance.
Domestically, whereas China has emerged as an innovator in such areas as fintech and digital
commerce, Islamic finance is one field of transactional and financial regulation that is largely
absent. While there is no inherent obstacle to Chinese commercial and financial institutions
acquiring expertise in sharia-compliant Islamic banking, they nonetheless will experience a
learning curve as the Chinese government promotes ties with Muslim countries. This brief
article reviews the short history of Islamic banking in China, assesses the current supply of
sharia-compliant financial instruments for cross-border business between Chinese parties and
counterparts based in Muslim states, appraises the demand of Chinese enterprises for Islamic
banking products and services, and, lastly, suggests possible trajectories for the integration of
Islamic finance into the political economy of China and Muslim states.
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