After a decade of attempting to invest in the French wine business, Chinese investors are beginning to pull out.
Key Details
- Since 2008, Chinese investors have purchased hundreds of French chateaus, attempting to make quick profits or to use them as status symbols. Now the investor well has run dry, with the majority of for-sale properties having no Chinese bidders.
- “Chinese investors [have] poured millions of dollars into French vineyards over the past decade, lured by the success of the likes of Alibaba’s Jack Ma and popular movie star Zhao Wei. Joining other wealthy foreign Bordeaux vineyard buyers from the U.S., U.K., and elsewhere, for the newly rich Chinese it became the ultimate status symbol,” says Bloomberg.
- “An increasing number of Chinese investors in French vineyards are now desperately looking to get out,” Bloomberg continues.
- The investments have dried up because Beijing is changing its tune toward global investment. The Chinese-French wine market has been slowly declining since 2019.
Why it’s news
The Chinese government is desiring to put restrictions on capital and to make sure its currency and savings stay within the country. Tightening measures have only made it harder for investors, who were suffering from other setbacks, to make the wine investment profitable.
“The retreat is emblematic of a broader pull-back by Chinese entrepreneurs from ambitious international expansions in a wide range of sectors, from luxury goods to insurance,” says Bloomberg.
“A confluence of factors—China frowning on flashy spending and clamping down on capital outflows, the pandemic, and culture clashes with French workers—made it impossible for several Chinese buyers to succeed. After being the top foreign investors in the market for a decade, they are rapidly disappearing from the scene.”
Backing up a bit
The relationship between French and Chinese representatives in the wine industry was spotty but there have been clear examples of success and failure.
“Li Lijuan, a marketing manager at Vineyards-Bordeaux, recounts the tale of a Chinese client who was dismayed at the work ethos on his property, wondering why French workers didn’t show up on time. He had a machine shipped from China for workers to punch in and asked her to install it. The workers took a hoe to the machine, breaking it into pieces,” says Bloomberg.
One of the largest success stories is actress Zhao Wei, who is expanding her investment into wine tourism and international distribution from Chateau Monlot in Saint-Emilion Grand Cru.
