The last
month has seen global powerhouses Europe and China embroiled in a fierce
dispute over wine exports, amongst other types of exports. Now that the dispute
has been resolved, what does this mean for the international wine industry?
At Ideal
Wine Company we recognise the emerging power of China. It’s hard not to;
increasingly they have come to dominate every international industry in which
they trade. They have grown to such an extent that they are now the second
largest economy in the world. Only the US is larger.
That is
why it is not surprising that China has become an important part of the global
wine trade as well. It may not be known for the wine it produces; we don’t have
any on the Ideal Wine Company product list at present. However, it is now a
very large consumer of wine. Due to tradition, the Chinese population have a
preference for red.
From
this we can ascertain that any dispute over wine exportation would have a knock
on effect on the international trade.
That’s just what happened.
Last
year the dispute began when the EU countries objected to China flooding their
market with Chinese solar panels. The dispute intensified when EU officials
announced that they were imposing tariffs on Chinese producers of solar panels.
The very
next day, the Chinese struck back with exportation restrictions on polysilicon,
which is an important element for some types of solar panels favoured by
Chinese producers, and wine. The Chinese justified the restrictions on
exportation of EU wine because they claimed that they were investigating whether
wine from the region was being sold at a low cost in the People’s Republic and
whether they were also subject to unfair subsidies.
The
international wine market breathed a collective sigh of relief this week as
officials on both sides of the fence announced that the dispute was officially
over. Although the issue of flooding the European market with Chinese solar
panels hasn’t yet been resolved, the wine issue has.
The
agreement the two powers came to should prove one to watch over the coming
decade. Europe has agreed to aid China’s domestic production of wine and in turn,
China has agreed to organise wine tastings for European products within its
borders.
It’s
clear that the agreement is being hailed on both sides of the continent. The EU
Commissioner for Trade reportedly said of the deal that it is: “yet another positive
development which will further strengthen the EU-China bilateral relationship”.
At the Ideal Wine Company, we see this as a chance to diversify Chinese
wine. With European knowledge and production methods, it could become a real
contender on the world stage in the next decade or two. It certainly is one to watch.
