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China aims to become the world’s largest wine producer within five years

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Who would have dared to make such a prognosis when not so long ago, they were mixing fine wines with soda? The People’s Republic has been transformed in a few years, not only in terms of Eldorado but as a superpower in wine.

China’s thirst for red wine seems to know no limits, while consumption of white and sparkling wine is also on the rise, dethroning France on the way to the top, according to the conjuncture study. Between 2007 and 2013, consumption increased by 2.75 fold (175.4 %), while during the same period it decreased by 5.8 % in Italy and 18 % in France. And this thirst is not ready to be quenched.

French wines dominate the Chinese market

China’s middle class and its 400 million people are more and more attracted to Western products as income and living standards rise. “The wine market in China has great potential and it is a chance for France, said Wu Jianmin, former Chinese ambassador in Paris. When the Chinese began to drink French wine, it was a luxury product. It is now within the reach of the middle class”.

French wines still dominate the Chinese market with a market share of nearly 50 %, far ahead of Australia and Spain. The People’s Republic remains the largest importer of Bordeaux. “In China, wine, which is very expensive, is mainly consumed by an urban class, says Boris Petric, anthropologist at the CNRS. It is the symbol of access to luxury and is associated with France. The culture of giving gifts is very important in China and wine sometimes finishes up on display, so sale cannot be confused with consumption. There are however a small slice of amateurs and wine bars are developing”.

pic 1Chinese students study oenology in France

Chinese investors continue to pay close attention to French vineyards, not only in the Bordeaux region, but also in Burgundy, the Loire and Languedoc-Roussillon. As well as this, Chinese oenology students continue to flock to French schools. However, although French wines still hold the lion’s share in China, they lead the way to the benefit of other European vineyards, notably in Spain and Italy.

In a few short years, China has also become the fifth largest wine producer in the world, behind Italy, France, the United States and Spain. More than 80 % of the wines consumed in China are locally made. Attracted by the potential of the Chinese wine market, French groups are investing in the People’s Republic. The Chinese government encourages such investments to develop poor or semi-desert areas with viticulture, such as Ningxia, the new Eldorado of Chinese wine or Xinjiang. China will become a key player in the wine industry. They have made the decision to become a major producer and will, in size and volume, be the largest wine producer in the world within five years.

Beijing has begun an investigation

This will not happen without provoking clashes with China’s European partners. Therefore, Beijing began an investigation in July in order to determine whether the EU will subsidise wine exports to China, thus creating a distortion of competition. The initiative has been interpreted as a measure of retaliation against the decision taken in Brussels to impose punitive tariffs on solar panels made in China… But it is also a sign of new aspirations of the red Republic.

Source: Patrick Saint-Paul
29th January 2014

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