China's only Muslim autonomous region is hoping to set up a free trade zone to expand two-way trade with Islamic countries, the local government said Friday.

"We are hoping to further trade and economic cooperation with the world's Muslim community," said Ma Fu, head of the commerce department in Ningxia Hui Autonomous Region.

Ma said the regional government had worked out initial plans for a free trade zone with the Muslim countries, but did not elaborate on the plans or give a detailed timetable.

He said Ningxia region, where 36 percent of the 6.2 million people are Muslims, traditionally enjoyed cultural and trade relations with the Arabian countries.

In recent decades, the region has relied largely on the more developed economies -- including the United States, Japan, Republic of Korea and the European countries -- as its destination markets.

The global financial crisis of 2008, however, severely dented the region's export earnings because of its reliance on these economies and caused a rethink about its overseas trade.

"We need to restructure our export markets and products," said Ma, "and will explore new markets in the Middle East, Southeast Asia and Central Asia."

He said trade with these markets would include Muslim food and other products specific to Muslims.

By 2015, he said the region would foster 20 export-oriented manufacturers of Muslim products, including processed food and farm produce.

Ningxia, whose Muslim population is at least 10 percent of China's 20 million Muslims, also hopes to attract investment from the Arab Leagues's 22 member states.

In September, it will host a China-Arab Economic and Trade Forum.

The regional government has issued a plan to train more Arabic language professionals in the coming decade.

Last year, two-way trade between China and the Arab states hit US$107.4 billion, compared with US$36.4 billion in 2004.

China and Arab countries have relations dating back about 2,000 years ago. China has diplomatic ties with all 22 members of the Arab League.

MOU to cement ties with Central Asian neighbors

Officials in southwest China's Sichuan Province signed a memorandum of understanding Thursday on regional cooperation with five central Asian countries.

The MOU was signed between the Sichuan branch of China Council for the Promotion of International Trade, Chamber of Commerce and Industry of Kyrgyzstan and the Embassy of Tajikistan in China.

It covers diverse sectors for cooperation between China and the five central Asian countries, including Kyrgyzstan, Tajikistan, Kazakhstan, Uzbekistan and Turkmenistan.

Sichuan Province has established trade and economic relations with all these countries in oil, gas, agriculture as well as service industries, said Chen Baoming, deputy secretary-general with the provincial government.

(Xinhua News Agency August 27, 2010)