November 2022
M.S. Erie "China and Islamic Finance: Past, Present, and Future" Transnational Dispute Management 19(6) (2022).
Full article available here.
Abstract
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.
This paper forms part of the TDM 6 (2022) Special Issue “Islamic Finance and Dispute Resolution” edited by Prof. Dr A F M Maniruzzaman.
