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Why China's wine will not soon rival Chile's

Poor climatic conditions combined with low consumer standards mean China produces little quality wine.

A man examines a glass of red wine from Spain during a tasting session at Vinexpo Asia-Pacific in Hong Kong May 28, 2008. (Victor Fraile/Reuters)

SHANGHAI, China — A group of Chinese businessmen dining recently at one of Shanghai’s most celebrated restaurants, spent more than $7,300 on food and drinks, including $1,500 on a bottle of fine Bordeaux. Then they diluted their glasses of wine with sparkling water.

That story, told by Jacky Goergler, general manager at Jean-Georges Vongerichten’s Shanghai outpost, explains why Chinese wines are not very good. Even though China is the sixth largest wine producer in the world, its consumers are not connoisseurs.

Even so, the wine list at Jean Georges at Three on the Bund, includes Shanxi province among selections from Bordeaux and Burgundy.

“If Jean Georges was in Paris not Shanghai, we would not have these Chinese wines on the list,” Goergler said. “It’s mostly tourists visiting China that are ordering those wines. They just want to try it. The white wines are drinkable, but the reds are only so-so.”

According to the San Francisco-based Wine Institute, China now produces more wine than countries such as South Africa and Germany, with their celebrated wine regions. But the vast majority of Chinese wine — 95 to 99 percent — is consumed domestically by largely inexperienced and indiscriminate wine drinkers. The result is mass production of poor quality wine.

But a few small vineyards, with the help of foreign wine companies, are attempting to lead a quality revolution, most notably the 12-year-old Grace Vineyard, based in central China’s Shanxi province. Judy Leissner, the Hong Kong-born CEO of Grace Vineyard, said that her winery has a distinct advantage over the competition — it doesn’t need to make a profit.

“My father started the winery in 1997. He started it for a very simple reason: he loves to drink wine,” she said. “The family has other businesses to fund the vineyard, so we can really commit to quality and when the wine is not good we can abandon it. That gives a huge advantage over other wineries, which rely on the business to generate income. Ultimately, I believe that commitment to quality will pay off and we will be profitable.”

Outside experts have helped Grace Vineyard in its drive for quality. A Bordeaux-based wine professor helped Grace find appropriate terroir. The company’s first winemaker was French and it now employs an Australian.

In addition, the winery recently partnered with Spanish wine company Torres to produce wines and continues to rely on Torres as it main distributor. “Last year, we jointly made a new white wine. It was the first time in China two families made a wine together,” Leissner said.

This connection to the wider wine world has been integral to Grace’s success, especially considering the lack of experience of most Chinese winemakers. “The winemaking industry is so new in China, so there are very few people who are well-trained and have experience,” Leissner said. "Even if they have a degree from a local university in winemaking, they haven’t tasted enough wine to develop an international palate. It takes a lot of time to train them.”

But some experts are skeptical that, even with devoted wineries like Grace Vineyards, the Chinese wine industry will experience quality revolution in the near future. Despite having a huge mass of land and diverse geography, China has an extremely inhospitable environment for growing wine.