The Guardian reported that wine sales in China reached £27 billion in 2012, a 20 percent increase over 2011. This is a massive increase as consumption only grew a measly 0.6 percent worldwide. On the supply side worldwide, wine production dropped 6 percent that same year but grew in China. While imports
consist of comprise 45% of the market, China is set to become the sixth largest wine producer in the world by 2016, once it overtakes Australia.
Increased wine production has been driven by two factors. The first is the combination of rising global temperatures and the development of heartier varietals which can live in a wider variety of geographies than ever before. Second, starting in 1985 the government has encouraged planting vineyards in areas with ideal environmental and climactic conditions. One instance of note was the conversion of 2,500 acres of farmland to vineyards in the Xiaojin valley in the Aba prefecture of Sichuan province. The local government is now planning to plant 16,750 acres of grapes before 2020. This specific project potentially encroaches into panda habitat, so this growth is not without some negative externalities.
This transition to winemaking has not been entirely profitable for the farmers either. One couple noted they would have made more had they still had their apple orchard, following a recent spike in apple prices. Additionally, for importers, price appreciation at the highest end of the markets has slowed and the market is stagnating a little bit. Regardless of short term fluctuations, it is clear that China will continue to become an increasingly important producer and consumer of wine.