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China Invests In Ningxia Wine Region

www.forbes.com by Mike DeSimone and Jeff Jenssen28/09/2018  

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The Ningxia Experimental Area is a wine region in progress.MIKE DSIMONE

Thanks to assistance from the central Chinese government and the Ningxia Agricultural Reclamation Management Bureau, the Ningxia wine region in northern China is expecting to double its vineyard area and quadruple wine production by 2022. Commercial vines were first planted here in 1982 by large wineries such as Great Wall and Changyu. The intervening years have seen a lot of investment from both the wine sector, such as Pernod-Ricard and LVMH, and owners from non-endemic industries such as petroleum, construction and domestic appliances. The first winery in the region opened in 1985.

Acreage under vine here grew from 6,575 acres in 2004 to 97,112 in 2014. Both the national and regional government are encouraging the creation of boutique wineries, primarily because of Ningxia’s unfounded reputation as the home of nothing but large, industrial-scale winemaking operations. The major project underway is the Ningxia Experimental Area, with 3,212 acres (1,300 hectares) devoted to vineyards and wineries. This large arid area between the base of the Helan Mountains and the Yellow River was basically desert prior to its division into 50 individual plots of just over 49 acres (20 hectares), each of which will provide grapes for its own small onsite winery.

In a region that already has 86 licensed wineries and 80 more under construction, this venture will rather rapidly add 50 wineries in a dedicated area which also has 700 acres devoted to roads, birch and pine trees planted for windbreak between the vines, visitor facilities and parking for buses and private cars.

The Ningxia Wine Bureau imported only a handful of grape varieties that are popular in China: Cabernet Sauvignon, Cabernet Franc, Pinot Noir, Merlot, Marselan, Malbec, Petit Verdot, Chardonnay and Viognier. As vines are being planted and wineries built, the Wine Bureau is carrying out tests to see which of these vines is most suitable to the soil and climate. This is a very cold region, where vines are planted at a 35 degree angle in order to bury them under soil from November to April so that they do not freeze and die under heavy winter snowfall.

All of the vines are imported directly from a French nursery, where they are evaluated by Chinese inspectors prior to export and are certified disease and virus free. No material—including roots, vines, or any young harvested grapes—may be removed from the experimental vineyard for three years, and all vines are subject to frequent inspection in order to insure that they remain free of pests. Fortunately this high altitude region (3,800 feet above sea level) is very dry, so while it is good for growing grapevines, it is inhospitable to mold, mildew and insects.

Thanks to assistance from the central Chinese government and the Ningxia Agricultural Reclamation Management Bureau, the Ningxia wine region in northern China is expecting to double its vineyard area and quadruple wine production by 2022. Commercial vines were first planted here in 1982 by large wineries such as Great Wall and Changyu. The intervening years have seen a lot of investment from both the wine sector, such as Pernod-Ricard and LVMH, and owners from non-endemic industries such as petroleum, construction and domestic appliances. The first winery in the region opened in 1985.

Acreage under vine here grew from 6,575 acres in 2004 to 97,112 in 2014. Both the national and regional government are encouraging the creation of boutique wineries, primarily because of Ningxia’s unfounded reputation as the home of nothing but large, industrial-scale winemaking operations. The major project underway is the Ningxia Experimental Area, with 3,212 acres (1,300 hectares) devoted to vineyards and wineries. This large arid area between the base of the Helan Mountains and the Yellow River was basically desert prior to its division into 50 individual plots of just over 49 acres (20 hectares), each of which will provide grapes for its own small onsite winery.

In a region that already has 86 licensed wineries and 80 more under construction, this venture will rather rapidly add 50 wineries in a dedicated area which also has 700 acres devoted to roads, birch and pine trees planted for windbreak between the vines, visitor facilities and parking for buses and private cars.

The Ningxia Wine Bureau imported only a handful of grape varieties that are popular in China: Cabernet Sauvignon, Cabernet Franc, Pinot Noir, Merlot, Marselan, Malbec, Petit Verdot, Chardonnay and Viognier. As vines are being planted and wineries built, the Wine Bureau is carrying out tests to see which of these vines is most suitable to the soil and climate. This is a very cold region, where vines are planted at a 35 degree angle in order to bury them under soil from November to April so that they do not freeze and die under heavy winter snowfall.

All of the vines are imported directly from a French nursery, where they are evaluated by Chinese inspectors prior to export and are certified disease and virus free. No material—including roots, vines, or any young harvested grapes—may be removed from the experimental vineyard for three years, and all vines are subject to frequent inspection in order to insure that they remain free of pests. Fortunately this high altitude region (3,800 feet above sea level) is very dry, so while it is good for growing grapevines, it is inhospitable to mold, mildew and insects.

In order to tempt wineries to establish a foothold in the Ningxia Experimental Area, the local and national governments are offering the first five years for each establishment for no fee. During this time, investors can build their winery and plant grapevines, which take on average 4 years to produce grapes suitable for winemaking. Electricity and water will also supplied at no charge during this time period. From years 5 through 10, wineries will pay a 5% fee on their receipts to the government, and after the 10th year—which is more than enough time to establish a winery—businesses will bear the full cost of land rental and utilities. Investors wishing to participate in the project must submit an application and be approved by the local government and the Ningxia Wine Bureau.

Although at the current moment the Ningxia Experimental area is just a large plot of dusty land with a few young vineyards and a beautiful mountainous backdrop that is populated with construction equipment and vineyard workers, it is exciting to think of what it will look like in 10 or 20 years. A dedicated, purpose built wine region that is constructed almost at once is almost unthinkable to those who are used to visiting well established old world wine regions. With wide lanes to accommodate guest and employee traffic, parkland and visitor facilities onsite, a bicycle path and 50 boutique wineries, the Ningxia Experimental Area will surely be one of the world’s most talked about wine destinations.