This past decade has been tough to swallow for China's wine producers; quality and variety have soared to new heights while production and sales have crashed to new lows.

No doubt, China is making more wine at international standards. Anyone touring the country's wineries will find walls of framed awards from global contests and high scores from leading critics.

Producers have also made major strides with labels, branding and distribution. Sourcing many local wines was once a struggle but China's ecommerce and logistics sectors makes it a snap. Chinese wines are even finding homes overseas, including in New York.

Yet, the numbers tell a dire story.

Production fell from 1.38 billion liters in 2012 to 118 million liters in 2024, the lowest output this millennium, per official stats. While the counting method might exaggerate the decline somewhat, the industry is in crisis, with snail-paced sales and dusty stockpiles.

Fingers point to plenty of culprits. A crackdown on the entertainment budgets of officials. A lack of economic confidence by consumers. A surplus of alternative alcohol choices. New generations of buyers that, in line with global trends, drink less. Even an enduring hangover from the pandemic.

But what one hears most is that Chinese wines are simply too expensive.

Unlocking value

In a world where supermarket wines in Europe cost just a few euros, and Two-buck Chuck helped build volume sales in the United States, bottles from Ningxia priced at $40-60 are a tough sell.

Still, Shuai Zekun, who critiques Chinese wine for James Suckling, argues some premium wines offer good value.

Shuai cites low-production Yunnan province Chardonnays like Xiaoling and Mingyi, priced $140 to $210, as examples.

"If you compare them with top Burgundy, the Premier Crus and Grand Crus, the quality is very similar and the prices are actually attractive."

Along those lines, a recent Suckling dinner in Hong Kong pitted China against the world. It featured five wines per side, priced $120-500, including powerhouses like Catena Zapata, Marchese Antinori and Lynch-Bages.

The 24 attendees gave the imports a narrow 3–2 win, with Shuai posting: "These top wines from China and top wines from around the world were on par."

Conspicuous consumption

Some high prices are also demanded by customers.

Judy Chan, CEO of Grace Vineyard, says she has priced her wines against international norms for the past 25 years, but some clients urged her to charge more.

"[For years], our clients kept telling me that our wines were too cheap," she explains. "The purpose is for giving [as gifts]. And they are really willing to pay for it."

Thus, while Grace’s flagship Chairman's Reserve has sold for around $100 for more than a decade, there is now an anniversary edition at $390. Other wineries target this niche, too, with labels at $400 and above.

We also see Chinese wines increasingly feature on restaurant menus. Fifteen years ago, just a few wineries made such lists. This year, the six finalists for the China's Wine List of the Year awards collectively featured 34 wineries from nine regions, many on multiple lists with multiple wines.

This suggests growing acceptance of local wines and their prices, with labels from Ao Yun, Longdai, Bao Zhuang, Helan Qingxue and more at $200 and up.

This goes beyond high-end restaurants. From wine bars to festivals to popups to campaigns by social media influencers, Chinese wines are fairly commonplace, especially from $20 to $50, thus giving mid-range brands a growing presence.

But these prices are still prohibitive for a great swath of the market in search of something below RMB100 ($14) – and often much lower.

Entry-level action

Even at this price point, Chinese producers have been bottling better and more affordable wines.

Ma Huiqin, a professor at China Agricultural University, notes quality gains across the spectrum.

"Chinese wineries have made progress, not only the boutique wineries, but also big names like GreatWall and Changyu," she says. "They have also begun to produce very good wines with character."

The low end is tough territory, with everything from French and Spanish wines priced at less than $2 to labels of dubious origin and quality. And a bit higher, we find no shortage of 90-plus point wines from Spain, Chile and elsewhere for less than $14.

Local producers find it tough to compete here. They face rising wages, heavy costs for imported equipment like barrels and the need in northern China to bury vines – at much expense – as protection from the harsh winters. Plus, taxes.

"We pay very high taxes on wine in China," Grace Vineyard's Chan says. "We are not considered an agricultural product."

Still, we see more wines from reputable producers below $14.

Mulando, a project pairing a Ningxia producer with online platform Vinehoo, launched in 2021 with an eye to affordable wines. And the flagship store on mega-retailer jd.com for Ningxia's Helan Mountain region has added entry-level wines by well-known producers like Yangyang, Rongyuanmei and Helan Red from $7.

Xiaoman wines, distributed by GVS, is part of this trend, with seven wines – five reds, a white and a sparkling rose – and trade prices from $4. Several wines have Suckling ratings of 87 or 88 points.

"Total sales for the Xiaoman brand are over 100,000 bottles since 2022," says GVS founder Chen Zihao, who cites bars and restaurants as the key clients. (In a recent tasting I organized of 15 local wines at or under $14, Xiaoman’s sparkling rose earned the most kudos.)

Transforming markets

With Chinese wines rising in quality and competitiveness at all prices, it seems this should be a golden age for local producers rather than one of crisis.

But these producers face a transforming market. Those crackdowns on official spending and the ongoing economic uncertainly sliced deeply into the status-based buying – for gift-giving and entertaining – of big reds made with Bordeaux varieties.

Now we see taste-based consumption growing. White wine sales are rising, trends like natural and orange wines have emerged, and more wine styles and grape varieties are popping up – niches that ambitious local producers are pursuing. But it will take time to fill that sales vacuum.

For Chinese wines, there is also the x-factor of awareness. Many older buyers still associate local wine with the plonk of yesteryear, while younger drinkers are more open-minded – and take growing pride in Chinese products – but have limited disposable income. That makes inexpensive quality Chinese wines an intriguing prospect. These offer newcomers a low-risk entry point that ultimately leads to premium products, as Grace Vineyard has shown for a quarter-century.

"There's so many wineries in Spain or Portugal or Chile with much cheaper wines than China," says Chan. "I think the only way that we can grow is by having a brand that is recognized and accepted by the customer."

The challenge is thus convincing consumers that local wines offer quality and value – no easy task in a cautious market flooded with alcohol choices. The alternative is hoping for the best while facing another decade of struggle.

Note: Jim Boyce is a judge in the China’s Wine List of the Year awards.