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mixed case: opinion and advice

Who's Afraid of China?

The People's Republic has embraced wine—particularly French—in the past decade; not everyone is pleased by the hug
Photo by: Mark Weinberg

Posted: Jul 11, 2013 12:20pm ET

By Mitch Frank

The exchange students may have recognized the three men outside their front door—they were neighbors—but they didn't know them. They only knew that the men were belligerent and trying to force their way into their home.

The house was in Hostens, a small town 30 miles south of Bordeaux, and was rented to six twenty-somethings from China who had arrived in France two months earlier to study enology. On the night of June 15, police knocked on the nearby door of three local men; someone had complained about their noise level. A police report claims the men had been drinking heavily. After the cops left, the men decided the students were to blame. They retaliated by barging into their house, punching and screaming racial epithets. One threw a bottle; it smashed into the face of a young woman.

The attack was isolated; the men were quickly arrested. But the timing drew a lot of attention—it was just days before the start of Vinexpo, one of the world's biggest wine trade shows, which Bordeaux hosts. In the past decade, China has become Bordeaux's largest foreign customer, in terms of volume. Before convention guests had even arrived, France's interior minister denounced the "xenophobic act, for which the culprits must answer before justice."

Is there a China backlash in France's wine regions?

China's growing thirst for wine, particularly French wine, has been a favorite topic in wine circles for several years. Our fascination is understandable—the People's Republic of China has engineered a spectacular economic story during the past two decades, growing from 2 percent of global GDP to 16 percent, according to International Monetary Fund data. As China's wealth has soared and an upper class has arisen, wine sales have grown dramatically.

But anytime a new group joins an industry as tradition-minded as wine, some people are going to grumble. The three men in Hostens may be just isolated criminals, but they might also have given voice to an underlying tension: Some wine people may not welcome the planet's newest big spenders.

French wine consumption has been shrinking for decades, and while younger markets like the United States have picked up some of the slack, French wineries know they face a lot more global competition these days. They are understandably enamored with the potential of a market of 1.3 billion people.

But global trade is never a one-way street. While French vignerons dream of a simple business plan—we make wine, China drinks it—plenty of Chinese businesspeople see opportunity too. In the past two years, several Chinese investors have bought Bordeaux châteaus. Some are just looking for a French country retreat and the thrill of proudly pouring their own wine at business dinners. Others are shipping their new châteaus' entire production back home to China's thirsty markets. Most of these sales have involved minor properties. But in May, enologist Michel Rolland sold his family estate, Le Bon Pasteur, to Goldin Group, a Hong Kong financial and real-estate company.

Bordeaux is accustomed to new blood. After all, Bordeaux was controlled by England for several centuries; it responded by hooking the English on claret. Over subsequent centuries, waves of Dutch, German and Irish merchants came to Bordeaux looking for opportunity and ended up calling it home. Americans have owned Château Haut-Brion since 1935. As of yet, no one has tried to block a recent château sale. (That doesn't mean the Bordelais aren't grumbling privately. Some of my friends there tell me—off the record—that they don't think Chinese drinkers really appreciate their wines, that Bordeaux is a status symbol more than a beverage.)

Burgundy is a little more traditional, reveling in its reputation of small family domaines. When Louis Ng, a Macau casino executive, bought Château de Gevrey-Chambertin for $10 million last year, the president of the local growers syndicate cried foul, claiming Burgundy's "cultural heritage" was at stake. But was all of Burgundy up in arms? No. The syndicate president happened to have been a rival bidder for the property.

Still, the world never lacks people who seek to use cultural tensions and national pride as cudgels. France's Front National (FN), the ultra-conservative nationalist party, made Ng's purchase an issue. "This acquisition is emblematic of the dangers that threaten French heritage," said Florian Philipot, vice president of the FN, pushing for legislation to impede foreign investment.

China can play that game too. When France backed a recent European Union tariff on solar panels from China, accusing the People's Republic of trying to corner the market by "dumping" the panels, or selling below cost, Beijing conveniently decided to launch an anti-dumping investigation of E.U. wines. The process could lead to higher taxes on Bordeaux and Burgundies in China.

Both France and China would be well-served by remembering that trade wars and nationalism often backfire. The world is too small a place. The quality of wine today is the highest in history, and the main reason is that winemakers no longer live in isolated pockets. Wine is made almost everywhere, sold to almost everywhere else, and winemakers trade ideas with their brethren around the globe.

My friends in Bordeaux should remember the last time they had new neighbors. In the 1980s, Japan rose to be the world's second-largest economy, riding an incredible wave of prosperity. Wealthy Japanese companies bought Bordeaux châteaus. Locals wondered if the Japanese could appreciate wine. They have proven to be sophisticated wine lovers—has any other culture produced a wine book like the manga Drops of God?—and able stewards of their wineries. This year's Fête de la Fleur, the closing gala of Vinexpo, was hosted by third-growth Château Lagrange, celebrating its 30th year under Suntory ownership.

As for Western angst in the 1980s over the Japanese "secret" of prosperity and potential for domination, it proved fleeting. Japan's economy sputtered in the early '90s and hasn't recovered since. That's something else both France and China would do well to keep in mind.

Jeffrey D Travis
Sarasota, FL —  July 11, 2013 3:12pm ET
I very much enjoy your mixed case blogs about relevant wine topics. As for the political advice to your friends, not so much.
Eric Campos
Canada —  July 12, 2013 1:59pm ET
A big topic that has gotten much more coverage on the other side of the pond recently -- good initiative! For anyone who knows French and is able to follow the French media directly, it can be quite shocking to see the opinions and perspectives that get air-time.
Personally, I cannot fathom French wine becoming a staple pairing with "Chinese food" (all 600 variants of it), gastronomy that is consistently and inherently better with tea or beer.
Kelvin Low
canada —  July 13, 2013 11:40am ET
very good blog. bordeaux does cater to the rich so as the old saying goes "live by the sword ...."
Peter Hellman
New York, NY, USA —  July 14, 2013 8:41am ET
I doubt that a single Bordeaux or Burgundy (admittedly, far fewer) property purchased by Chinese buyers has failed to be much improved under its new ownership, just as Lagrange was under Japanese ownership. And that's the bottom line.
Mitch Frank
New Orleans, LA —  July 18, 2013 3:22pm ET
Thanks for the comments, all.

Jeffrey - sorry to disappoint. All I can tell you is that when I switched from writing about politics and foreign affairs to writing about wine, one of my major motivations was that wine encompasses so much - farming, history, business and even politics. Foreign trade in wine has been a political issue for centuries.

I also like the idea of the ancient Greek symposium - that people can sit down over wine and feel free to discuss and argue over any topic.

Cheers!

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