The People’s Daily recently published an article reporting both wine production and wine consumption in China have grown about 10 percent per year over the past decade.  China is working hard to expand its importation of vintages from major wine-producing countries to satisfy the evolving tastes of Chinese consumers.  Wine connoisseurs are, of course, more interested in the development of China’s own wines, which are, for the most part, still in their infancy.  The article asserts that:

The 500 or so Chinese wineries account for 80 percent of the domestic market, but they lag behind their foreign counterparts in terms of management, technique and quality.

Other sources report to the contrary.  A Business Week article published this week, entitled, “Potations From Chairman Mao,” reports the new Grace Vineyard in Shanxi province is making “surprisingly good wine:”

Grace’s $10-a-bottle Chardonnay has melon and baked apple flavors, and its $80 Chairman’s Reserve — a blend of cabernet sauvignon, merlot, and cabernet franc — is complex enough to rival many top-quality Bordeaux.

The reason for this may be that Shanxi is on the same latitude as the Bordeaux region of France.  Its climate and soil are similar, “making it ideal for growing cabernet sauvignon, Chardonnay and merlot grapes.”

In another part of China, forty miles northwest of Beijing, a French-Chinese joint venture vineyard, the Sino-French Demonstration Vineyard, is attempting to build interest in wine and wine-making techniques.  USA Today reports that local authorities hope to market tasting tours within the next year along the road connecting the Sino-French Vineyard with others in the area.  The idea is to create a Chinese version of California’s Napa Valley.

China still has a long road to travel before it gains the reputation and respect of its foreign competitors.  Many of the country’s current vintages are blends of Chinese grapes and imported bulk wines from Chile and Australia.  China’s wine industry also lacks any formal system of control of origin like those in Italy and France.  China has become the hot spot for counterfeiting historic wine labels, such as Sassicaia, Chateau Mouton Rothschild and Penfolds Grange, which slows down its climb to credibility overseas.

Chinese wine imports in the first seven months of this year were up 88.8 percent over the same period last year.  Even though domestic wine production represents only one percent of China’s alcoholic drinks market, with 359,000 hectares and 3.34 million hectoliters in volume, China is currently the 6th largest wine producer in the world.  Wine, which used to be regarded as strictly a luxury good, is becoming increasingly popular as people’s incomes and living standards improve.  This wine blog has six Chinese language blogs on its blogroll.

I have had social conversations with American wine distributors about their importing Chinese wines into the United States, both for retail and for sale at Chinese restaurants.  They look at me as though I have two heads.

What do you think?

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.