'Grape expectations' as wine industry offers safer returns

I can remember the moment a friend suggested that I buy my first portfolio of shares, just around the time the benchmark Shanghai Composite Index neared 5,000 points at the beginning of June.

"Even novice investors like you will make instant money," she insisted, fully confident in her belief that "money breeds money" and that the stock market represented the smartest way to becoming rich.

But as we have all seen so painfully in the past month, this desire - some might say addiction - to speculate has led to troubled times.

I declined the temptation, because I have concluded the much more solid way of accumulating wealth must surely now be in embracing "Made in China 2025", one of the country's flagship economic initiatives which is calling on people to return to what actually kick-started China's economic miracle of the past 30 years: Manufacturing.

However, much as location is the crucial ingredient to successful property speculation, there are some key ingredients as to what now constitute profitable manufacturing in 2015 China, compared with 1985.

The biggest consideration is how can Made-in-China products avoid attracting the now-unfair labels of "cheap or counterfeit, produced fast but of low quality", and emerge onto the world stage and be considered "genuine, innovative and quality".

As the stock markets tank, there has never been a better time, I concluded, to focus now on manufactured products which could combine all three of the above, plus age-old traditions - and top of my list is wine.

The product, the demand for which is growing fast in China, ticks so many of the right boxes.

Wine has been imported here, mainly from traditional Western markets such as France, Germany and Italy but increasingly from Australia and Latin America too.

Today the market in China is highly competitive, with quality and value for money its most important selling points. But it's perfectly suited to becoming a world-class export product too.

Similarly, I got to thinking that our best-known liquor brands, such as Moutai and Wuliangye, which have long been considered around the world as nothing more than "firewater", could be better marketed and sold as something a bit special and cultural instead, around the globe.

Wine is also a slow industry, not mass-produced, fast and furious, like so many of China's more traditional manufactured items.

Our home-grown grapes are not expected to yield wine for at least three years.

They require careful understanding of local climates and terrain, and waiting for at least a decade, in fact, makes the most desirable and valuable vintages.

This is completely the opposite of making "fast money". It is an industry that needs to be time-tested and is largely closed to short-term profiteering.

And then there is the food safety factor. At a time when our more traditional producers are increasingly under the spotlight for their standards, Chinese chateaus and wineries are already opening themselves up freely to a growing number of tourists, which not only boosts their revenues but also helps grow consumer confidence over their production standards.

On the innovation front, too, the best-selling Chinese wines are already leading the way in techniques and ideas, while still steeped in tradition, relying very much on natural methods of production - how the vines are trimmed and tended, then often picked one by one for better quality, all by hand: Qualities so demanded by Western wine lovers and buyers.

I have just met Li Yangang, who is currently studying for the much-coveted title among global wine professionals, Masters of Wine, awarded by the London-based Institute of Masters of Wine.

There are growing numbers of Chinese, Li told me, interested in the career, all of whom have as their number one ambition and resolve to make the very best products, in which they have total confidence.

I also made a trip recently to the prominent Chinese wine-growing area at the east foot of the Helan Mountain in the Ningxia Hui autonomous region, which has expanded to cover tens of thousands of hectares in grapes.

Industry officials there already claim the convergence of the world's leading equipment and technology means the region has made huge strides forward in production mechanization, equipment modernization and internationalization.

I met the owner of the Kanaan Winery, Wang Fang, who said her wines were aged in oak casks to achieve maximum fragrance and depth. But her production is far from small scale. Her ambition is quite simply to make her Chinese wine a byword for world-class quality and value.

Another estate owner from Ningxia Lilan, Shao Qingsong, said he insisted on keeping his chateau "boutique", producing just 40,000 bottles of wine annually, a capacity close to premier chateaus such as Lafite-Rothschild, the iconic wine estate in France, owned by members of the Rothschild family since the 19th century.

But when I asked whether he hoped one day to become a similar industry legend, he said: "We know we can never be a Lafite. I am happy Lilan will always be Lilan."

That confidence in his product and its potential appeal globally are evident throughout China's winemaking industry.

At a time when market confidence is what's shattering the investment dreams of so many who have ploughed their cash in stocks, the option of investing instead in quality Made-in-China brands such as wine, surely represents a more satisfying and economically sound route to riches.

Contact the writer at wanghuazhong@chinadaily.com.cn