It is believed that Islam began in China during the Caliphate of Uthman ibn Affan, the third Caliph of Islam.
The Caliph sent a deputation to China in 29 AH (650 CE, eighteen years after the death of the Prophet Muhammad (peace be upon him).
The delegation was headed by Sa'ad ibn Waqqas a maternal uncle of the Prophet. Sa'ad Ibn Waaqas invited the Chinese Emperor (Yung-Wei) to embrace Islam.
To show his admiration for Islam the Emperor ordered the establishment of China's first Mosque. The magnificent Canton Mosque is known to this day as the 'memorial mosque' and it still stands after fourteen centuries.
In Arab records there are only sparse records of the event, but there is a brief mention in the ancient records of the Tang dynasty. Chinese Muslims consider this event to mark the birth of Islam in China.
Source : http://www.bbc.co.uk