The Global Perspective of Islamic Finance and the Potential for China to Tap into the Islamic Finance Market

Abstract

Islamic finance is considered one of the fastest-growing segments of the global financial industry. Over the last four decades, Islamic finance has expanded globally to western and other non-Muslim countries. This paper aims to explore the potential for China to tap into the Islamic finance market and the amendments necessary to the law to facilitate its development in China. This paper has been conducted as a response of massive demand of financing and the potential for China to tap into the Islamic finance market. Thus, it fills an existing gap in the literature and provides additional source on the features of Islamic finance, opportunities, and challenges of introducing Islamic finance in a non-Muslim country. This paper adopts a content analysis approach and stresses on various aspects of economic sustainability in China, and the potential benefits that may China gain through the adoption of Islamic finance. The study reveals that China has huge opportunity to capitalize from Islamic finance for economic and sustainability development, particularly in the implementation of China’s Belt and Road Initiative (BRI). It also discusses the issues and challenges that potentially may be faced by China in introducing and implementing Islamic finance.