The transition from the Tang to the Song dynasty (960–1279) in China did not greatly interrupt the trends of Muslims established during the Tang.
Many Muslims began to go to China to trade during the Tang dynasty. During the Song dynasty, Muslims began to have a greater economic impact and influence on the country. During the Song dynasty (960–1279), Muslims in China dominated foreign trade and the import/export industry to the south and west. Indeed, the office of Director General of Shipping for China's great seaport of Quanzhou was consistently held by a Muslim during this period.
The Chinese materia medica 52 (re-published in 1968-75) was revised under the Song dynasty in 1056 and 1107 to include material, particularly 200 medicines, taken from Ibn Sina's The Canon of Medicine. Meanwhile, further west, Arabic storytellers were narrating fantastical stories of China, which were incorporated into the One Thousand and One Nights (Arabian Nights), the most famous being the story of Aladdin. Other Arabian Nights tales set in China include "Tale of Qamar al-Zaman and Budur", "The Story of Prince Sayf al-Muluk", and "The Hunchback's Tale" story cycle.
In 1070, the Song emperor, Shen-tsung (Shenzong) invited 5,300 Arab men from Bukhara, to settle in China. The emperor used these men in his campaign against the Liao empire in the northeast. Later on these men were settled between the Sung capital of Kaifeng and Yenching (Yanjing, modern day Beijing). The object was to create a buffer zone between the Chinese and the Liao. In 1080, 10,000 Arab men and women migrated to China on horseback and settled in all of the provinces of the north and north-east.