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Like in many other industries, China is looking to use their massive scale to impact wine production. Currently they have more hectares of vineyards than California and therefore have the potential to notably influence the global wine industry. As a result of immature vines and inexperience, China’s wines are not up to global standards and are not seen by many international winemakers as noteworthy competition. Instead, many of these producers look to China as an emerging market since its entry into the WTO – the tariff on a bottle of wine dropped from 43% to 14%, and tariffs on bulk wine dropped to 20%. Companies exporting to China see it as a gateway to expanding into the Asia-Pacific region. This market is an attractive investment to international producers because unlike many other countries, China’s per capita consumption of wine is quite low, as it is still somewhat of a novelty in the country's culture. China lead wine growth in the Asian-Pacific region in 2005 and sales were boosted by the westernized drinking habits of citizens. This drift was also seen in other regions like South Korea, Thailand, and Taiwan. Japan, however, moved from traditional sake products to trendier local spirits1. According to Standard & Poor’s 2006 Industry Surveys report, however, it seems that the wine market in Japan is just emerging and should not be ignored. This market presents growth opportunities for US producers given its increasing demand for New World wines, an strengthening economy, deregulation, and changing tastes. Reasons for success: - Their cheap wines are attractive to unfamiliar or unsure consumers.
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