At the inaugural meeting held on Friday, the construction of a comprehensive bonded area in the regional capital of Yinchuan was also announced.

The pilot zone and the four-square-km bonded area in the zone aim to deepen the opening up of China's western inland areas to countries located directly west of China, especially in order to boost trade, investment and friendly exchanges between China and the Arab world, said Wang Zhengwei, chairman of the regional government.

According to the establishment program approved by the State Council in September, projects in the zone will enjoy 66 preferential policies in investment, tax, finance and land use after its establishment.

The League of Arab States has become China's seventh-largest trade partner. Trade between China and the member countries surged 34.7 percent to 195.9 billion U.S. dollars last year.

Ningxia is the only provincial-level autonomous region for the Hui people, the largest Muslim ethnic group in China. About 30 percent of the region's population is Hui.

As many people in the area share religious beliefs and customs with Muslims living in Arab countries, the region is a perfect platform for boosting cooperation with those countries, according to Wang.