Monday, May 17, 2021

Where China get its wine, these days

Last week I looked at the declining wine market in China (So, why has China gone off the boil?). This week, I thought that I might look at where China gets its wine — has that changed recently, as well?

In one sense, China is no different to other Asian countries, in that wine is increasing in the mix of alcohol beverages, and beverage production has not kept up with the increase in demand, so that imports are needed to fill the gap (Asia’s emergence in global beverage markets: the rise of wine).


Bottled wines dominate China’s imports, making up more than 90% of the value each year; so, we are talking about a fine-wine market. As such, we would expect the wines to be sourced from well-known fine-wine regions, from around the globe. The first graph shows the top eight importers by value, for the past five years. [The data were compiled from various online reports, but the origin in all cases was from the Chinese Custom's Office.]

Note that the vertical scale is logarithmic, so that we can clearly see the lower-ranked countries. These have been followed by Germany, Portugal, and South Africa, in various orders depending on the year.

Origin of wine imported into China 2016-2020

Note, first, that there has been a general decline in the value of imported wine since 2018, as discussed in my previous post (due, for example, to the slowing of the local economy). This has affected all of the importing countries except Argentina. This may indicate an increasing interest in Malbec wines, and seems to bear out earlier hopes (Can China ‘save’ Argentina’s wine industry?).

The USA has had a rapid decline since 2018, presumably due to the ongoing trade war with China (US wines latest victim of trade war with China’s 93 percent tax). Naturally, there are moves afoot to try to change this (Feinstein, Padilla ask Biden admin to get China to lift tariffs on U.S. wines).

France has also had a rapid decline since 2018, having been the top importer until then, in both value and volume. The French wine was apparently being replaced by wine from Australia, which showed a steady increase until 2019, when Australia became the top importer. Since then, the trade war with Australia has decimated wine imports, which in 2021 have been very little from that country (see the graph in: Wine exports fall four percent to $2.77 billion). The Australians are not taking this lying down, of course (Australia is taking China to the World Trade Organisation over its intensifying trade war), and the USA has pledged to help (US Secretary of State says Australia will not be left alone to face China coercion). In the meantime, France has now returned to number one in 2021 (France leapfrogs Australia to become top wine supplier to China), although Chile, Spain, Italy, and the USA are all expected to benefit, as well (How will markets adjust to China’s new tariffs on imports of Australian wine?).

It is worth noting that Spain and Italy, the other two European nations on the list, have run pretty much neck-and-neck, a long way behind France. China has apparently been Spain's fifth largest wine market (Spanish wine in China), while it has been somewhat less important to Italy — 14th by volume and 13th by value (Italian wine exports by destination).

Also, Chile, the other South American country, has consistently been ranked third in imports, a long way behind France and Australia, although China has been its biggest export market since 2016 (China's flourishing wine market becomes top export market for Chilean vineyards). It is poised to replace Australia on the list if things continue the way they are going this year (Why Chinese tipplers like Chilean wine).

Volume of wine exports from China over the years

Finally, it may be worth taking a quick look at wine exports from China, as shown in the second graph, for export volume since the 1980s. Domestic wine consumption relates to imports net of exports, of course.

You may make of this what you will. I have not seen any discussion of the three distinct peaks of wine exports (1993, 2006, and 2014–2016). Meanwhile, the wine export quality has been reported to be variable (Chinese wine — ready to export?).

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