Regional competitiveness and future perspectives of wine production in china

Supervised by:
  1. Isabel Bardaji Azcárate Director

Defence university: Universidad Politécnica de Madrid

Fecha de defensa: 17 November 2017

  1. Vicente Sotés Ruiz Chair
  2. Eva Iglesias Martínez Secretary
  3. Belén Iráizoz Apezteguía Committee member
  4. Almudena Gómez Ramos Committee member
  5. María Dolores de Miguel Gómez Committee member

Type: Thesis


China has a long history of grape cultivating and wine making, which can be tracked back to thousand years ago. Nowadays, after a rapid economic growth of thirty years, China has become one of the world's largest wine-consuming markets with great growth potential. At the same time, we cannot ignore the fact that China is an important wine producer as well. In recent years, both the vineyard area and wine production have increased dramatically in China owing to the increasing domestic demand, improved life-standard and improved technologies and matured management experience in the area of viticulture. In the meantime, the international wine market is vigorously competitive. Hence, there is a need to consider the potential of China's domestic production to satisfy domestic demand and even the competitiveness in the international market. With this goal, this Thesis provides four questions: 1. What is the competitiveness of Chinese wine industry compared to the main wine producing countries in the world and how has it evolved historically. 2. Considering the huge size as a country and local diversity, what are the main factors of regional competitiveness and how is the regional competitiveness of wine production in different wine regions in China. 3. Facing the influence of climate change of both challenges and opportunities, what are the possible effects on regional competitiveness and adequate adaptive measures. 4. What are the internal and external factors which shape the wine industry and wine market in China and what kinds of strategies can contribute to the further development of the wine industry in China. To answers these four questions, the specific objectives of this thesis are as following: 1. To analyze and determine competitiveness of Chinese wines in a global scenario. 2. To analyze the regional competitiveness of local wine industries and factors which contribute to its determination. 3. To study the impacts of climate change on the wine production in China and provide adaptation strategies. 4. To analyze determining factors and provide adequate strategies for the development of the Chinese wine industry. To support this study, several methods have been adopted like literature review, statistical analysis, market competitiveness analysis, Porter’s Diamond Model and industry competitiveness analysis, climate change scenario analysis, climate change adaptive capacity analysis, and SWOT and SWOT Matrix analysis. Overall, the results of this study provide scientific implication on the research of evolution and perspectives of China’s wine industry from several aspects like historical, social, industrial, commercial and cultural variables. Even though China has dramatic expansion in domestic vineyard and increase in grape and wine production, compared with other countries, the competitiveness of Chinese wine production is still low with small export wine value and volume but the competitiveness general has been improved in a small scale in recent years. Wine producing regions are across the whole nation with diverse natural and social conditions. According to the Porter’s Diamond Model and the theory of industry competitiveness, Xinjiang has the highest competitiveness of Factor Condition; Beijing possesses the strongest competitiveness of Demand Conditions; Xinjiang ranks the first of Related and Supporting Industries and Shandong is the first in relate to Firm Strategy, Structure and Rivalry. For the Total Competitiveness, Shandong has outstanding advantages. For climate change, a general tendency of increasing temperatures and accumulated temperature, water scarcity with increasing number of frost-free days and higher frequency of extreme events, all of which will bring both challenges and opportunities to the young Chinese wine industry. Climate change adaptive capacity of Chinese wine industry is analyzed and adaptive strategies are provided at policy, financial, technical, institutional and collaborative level. According to SWOT and SWOT Matrix theory, 6 internal factors for Strength, 9 internal factors for Weakness, 9 external factors for Opportunity and 7 external factors for Threat, considering both traditional conditions such as wine production, wine policies as well as new conditions such as e-commerce, climate change and domestic economy trend, have been achieved in four sectors- Grape Producing, Wine Processing, Wine Selling and Wine consuming- of wine industry in China. For the further development of Wine industry in China, 8 strategies such as government support and establishment of wine laws at governmental level, 5 strategies such as a diverse and sustainable development at industrial level and 4 strategies such as broadcast of wine knowledge at business level have been provided.