Wine in China: A Report to the California Association of Winegrape Growers

The market for wine in China is still in its beginning stages. Total consumption is less than 1/3 liter per capita (although it is higher for urban residents, more than 1 liter per capita). Domestic wine satisfies most of the demand and, despite it poor reputation, is gradually improving in quality. As income levels increase, there are good opportunities for imported wines. Although the wine market in China is emerging from almost zero consumption a decade ago, there is already a small but loyal following in major urban areas. It is this demand which is driving the emergence of the industry. The income elasticity of wine (according to our study) is more than 2 (as income doubles, consumption increases fourfold. The urban consumer class, which is estimated to exceed the total population of the United States, will almost certainly develop into a large market for both imported and domestic wine in the future.