Up to a few years ago no one would have dreamt that China would be producing fine wine in respectable - and commercial - quantities.

The explosion of interest in both production and consumption has provided the impetuous for many individuals either to reinvent existing enterprises or plant from scratch in their quest to make commercial and fine wines.

However, it usually takes a visionary such as Serge Hochar of Chateau Musar, to produce fine wine from an area previously thought to be no good for anything other than commercial wine.

Certainly China is one country that has experienced a seismic in its attitude to wine over the last fifteen years. Many companies, both foreign and domestic, are currently engaged in quality wine production and during the last ten years investment, planting, technology and expertise has all rushed in.

By 2000, China was crushing 300,000 tons of fruit and current estimates indicate that by 2010, the annual crush will have climbed to 810,000 tons. Currently Chinese vineyards are increasing at 4% per year, a rate second only to that of Australia.

Yet, as almost all of the companies engaged in wine production in China concentrate on the commercial segment, what is the potential to make fine wine in China – and who will make it?

Conditions ¡V Regions

The dates for the earliest production of grape wine and the introduction of Vitis Vinifera to China are unclear. Either way it ended up thriving in the modern day Xinjiang autonomous region in the North West of China, where the indigenous Uygur people became the cultivators.

Until very recently, the production of rice wine and other grain liquors dominated alcohol production in China. This started to change in 1892, when the Zhang Yu Wine Company opened at Yantai in Shandong Province. By the late 1980s as the economic climate changed and wine production had modestly increased, the most successful of these state-owned companies started joint ventures with foreign wine companies.

China can now be split into two potentially large wine regions, the Northeastern Central Heartland region and the North West of China. Most of the recent development has been in the Northeastern Central Heartland areas around the capital Beijing and in the maritime areas of Shandong (which is on a similar latitude to Chablis).

Here there is good potential for commercial wines and an increasing focus towards more quality production, as the introduction of modern techniques, noble grape varieties and Western investment take hold. Fine wines appear to have the most potential in Hebei and Shandong, where cooler climates and premium varietals have already produced good results with Riesling, Chenin Blanc, Chardonnay, Merlot, Cabernet Franc and Syrah.

It is still early days, although some of the more established producers such as Dragon Seal and especially Huadong Winery in Shandong confirm this region’s potential.

In the other region in the North West of China, progress has been much slower and production is still fairly traditional and dominated by the state. Most production is located in the Turpan Depression where the wineries traditionally use irrigation with water sourced from the Tianshan glaciers many miles away and channeled to the vineyards through very old underground channels called Karez. The Turpan Depression is the major grape growing area in this region and is famous throughout China for its table grapes.

The lie of the land, the terrain and the arid climate are not vastly different to the arid areas of the Riverland in Australia and the Central Valley in California and very recently has seen some international investment for wine production.

Temperature ranges here are marked, with 40 days each year greater than 40C. In the winter the region experiences lowest temperatures of 30 to 40C. Average rainfall is 16mm and Turpan has the distinction of being relatively mould free. Turpan vines are traditionally either trellised on 3-4 metres high pergolas over streets and roads or are untrellised. Untrellised vines are covered with soil or straw to prevent freezing in the winter, whereas vines trellised over roads are detached, laid in a trench by the road and buried, only to be dug up and re-trellised in the spring.

The Wines

The Wine companies currently active in China fall into three groups. In the much larger commercial beverage sector, big multi-national companies and their Chinese partners dominate the domestic production scene. Companies such as Remy Martin, Great Wall, Pernod Ricard and now Castel Freres, have substantial interests in Chinese joint ventures producing beverage style wines for the lower and most popular end of the market. These wines are mostly based on major international varieties yet have a style that is directed towards the Chinese consumer. The whites can be aromatic (using Muscat and Riesling) with hints of sweetness and soft acidity. The reds tend to be based on Cabernet Sauvignon, off dry with very soft fruit, soft tannins and very approachable in character.

Wines are often blended with fermented juice from imported must to make up the volumes required by the domestic market. These wines are primarily only for the domestic market and other than purely for curiosity value, rarely make their way outside of China.

There are several brands that exclusively use imported juice, including Imperial Wines in Shanghai, Chantefleur and Torres. However many Chinese consumers are suspicious of them, believing that wines made exclusively outside the country are of higher quality. Again these wines are exclusively produced for the domestic market and are unlikely to be seen outside the country.

Lastly there are a growing number of wineries producing wines from their own estates, or in the process of building their own estates. Dragon Seal and Huadong are the forerunners in this Western approach to wine cultivation and production and are being joined by many other companies with similar ambitions including Bodegas Norton of Argentina.

Huadong Winery was founded in 1984 by an Englishman, the late Michael Parry and is already acknowledged as China’s finest winery, and many would say South East Asia’s finest. Under Michael’s guidance, the site at the foot of the Laoshan Mountains was pinpointed and a state of the art winery designed and built with the help of Philip Shaw, the chief winemaker at Rosemount. During the developing years, a succession of international winemakers and consultants were employed, such as Charlie Whish, Dave Kingsbury, Nicolas Grima of Ch Laroche Pipeau in Fronsac, Steve Chapman and more recently Petaluma to harness the potential of this emerging region. However since 1994, the internationally trained Xia Guangli has been the winemaker at the helm.

Michael Parry and later Gabriel Tam, the Executive Director of Huadong have both grown up with the Western Wine philosophy of good ripe concentrated fruit, low residual sugar, balancing acidity and typicity. Many Chinese producers in the early 1990’s still produced wines that were thin, oxidized and full of residual sugar.

Gabriel Tam points to the evolution of the Huadong range of wines from individual sites as a way of achieving that goal. ¡¥Over the last fifteen years we have developed and nurtured our Chardonnay at Dezeshan vineyard, our Cabernet Sauvignon and Cabernet Franc at Ming Cun Vineyard and our Riesling at Xiao Ying at the non-premium and premium level. Huadong now produces 150,000 cases a year and utilises the most modern technology and skilled labour to ensure its quality.’

Expansion into the Pingdu region was instigated to achieve greater complexity within the existing wines and provide added complexity for the premium labels as the limestone soil of the Dezeshan vineyard has done for the premium Chardonnay. Pingdu is 100km west of Huadong and is a distinctly different microclimate. Whereas humidity and the resultant moulds often blight the Huadong vineyard, the hotter and drier climate of Pingdu with more hours of sunshine offers the potential of more concentration in the red varieties.

When you taste the wine it is not difficult to see why, as the fruit character is unusual, in that the characters are half way between a Chablis style and the riper more tropical new world flavours. Xia puts these soft subtle flavours down to viticultural practices, selective picking and careful handling of the fruit, plus the climate and soils.

Her quest for quality fruit has lead to Huadong building long-term relationships with individual growers in Pingdu.

As with any agricultural community, there are several companies fighting over the small precious supply of grapes from Pingdu. ‘Many growers will seek the highest prices for their grapes, irrespective of their sugar levels and their fruit quality,’ she adds so there is plenty of educational work to do as well.

Since the Chardonnay has received domestic and international recognition of its quality, Xia has turned her attention to the red wines of Huadong. ‘I want my reds to gain in weight, depth and richness and to develop a deeper colour,’ she explains. This has led her to experiment with other earlier ripening varieties. ‘The 2001 vintage at Huadong is our first trials with Merlot and a little Syrah. Unfortunately, our estate’s susceptibility to mould precludes Pinot Noir as a potential variety, although we have had success in the past with Gamay.’

Huadong is so confident of the regional potential of this area, that it is now embarking on a new phase of increasing its capacity, by installing new fermenters, presses and a temperature controlled barrel cellar. These production facilities are to be augmented by a new modern visitor center, based on the Australian cellar door model. Xia proudly states, ‘our aim at Huadong is not only to make the best quality wines that we can, but to harness the character of our unique terroirs. We want to be able to offer the world wines that are uniquely China’s and show that we can add to the variety of wines currently available.’

Pang Xueyong a prominent local businessman and wine connoisseur added ‘this will compliment the culinary offerings of the Qingdao area, which is already famous throughout China for its beers, spring water, seafood, fruit, vegetables and our 2,000 year old history of quality alcoholic beverage production.’ To this end the vision and enthusiasm of Michael Parry and Gabriel Tam, must be applauded.

The Chinese Wine Consumer.

Broadly speaking wine drinkers in China fall into three categories

– Wealthy upper class and the expatriate communities/tourists who frequent the ultra premium end of the market

– The emerging middle class in the major cities that are engaged in wine experimentation and appear to frequent the commercial segment of the market.

– The majority of the population of China is not in a financial position to consider wine purchasing.

Wines available in China can also be classified into three categories.

– The low US $5 – $7 bracket is dominated by domestic brands (ie Dynasty)

.
– The mid $8-10 range supports the wines made from imported juice, which are bottled in China (ie Chantefleur, Tres Torres and Imperial Brut).

– Imported wines such as Jacob’s Creek start at the US $12 -$15 range and go all the way to the ultra premium end of the pricing scale with the First Growths of Bordeaux. Huadong Premium wines are in this category.

Beer is a good price comparison and is marketed aggressively. There is also a marked price difference with premium branded brands (such as Budweiser and Becks) at around US $1 a litre and local brands at 25 cents a litre. The average weekly wage in Shanghai is US $4 – $5.

Written by Rupert Dean