Data for the performance of China’s domestic wine market during 2022 makes for bleak reading, but while the downward trend continues there are signs of recovery.

According to figures released by The National Bureau of Statistics of China, the production of domestic wine in China during 2022 was 214,000 kilolitres, representing a year-on-year decline of 21.9%. The volume of imported wine was also down, falling 21.1% to 340 million litres.

The decline in China’s wine industry has become a familiar trend in recent years. From a peak of 1.382 million kilolitres in 2012, domestic wine production has seen a continuous drop, reaching a low of 679,100 kilolitres in 2017.

The Covid pandemic combined with anti-dumping tariffs applied to Australian wine further impacted the industry in 2019 and 2020. In 2021, the production of domestic wine returned to around the same level of the early 2000s, with just 268,000 kilolitres produced.

Despite the downward trend, many within the industry still feel optimistic. The wine market is considered by some to be growing slowly.

Judging from the sector’s market performance in January 2022 and during the Spring Festival, there are signs of obvious recovery, giving confidence for the future. With the pandemic situation improving and the market returning to normal, the industry is expected to bounce back and resume its growth.

The disappointing performance of wine during 2022 was, however, balanced out by soaring sake exports from China, and a robust baijiu market. Sake exports showed growth for the 13th consecutive year, bolstered by increased refrigerated transportation of the product, which has helped to maintain its quality, especially when travelling to growing markets such as Malaysia, Vietnam and Thailand.

Meanwhile, the fortunes of baijiu are uncertain with some producers reporting soaring demand and putting their prices up, while others warn of a domestic surplus of baijiu, with stocks proving hard to shift and which could push prices down. Two major baijiu companies have just listed their shares on the Hong Kong stock market, which indicates that the sector remains strong.