China’s Wine Import Industry: An Economic Analysis of Influencing Trade Factors

International audienceIn recent years, China is undergoing a huge economic transformation since joining in World Trade Organization (WTO) and it has showed an increasing demand for wine. As China’s wine consumption market is increasingly larger, the European market is becoming increasingly saturated, more and more wine foreign trade and foreign capital have chosen to enter China. Since 1996, China’s wine imports have gradually increased and the trade deficit has significantly expanded. Thus, the objective of this study is to analyze the China’s competiveness of wine in the international market. We mainly focus on the factors that most influenced the performance of imported wines from 1995 to 2014. The aim is to testify if the wine imports affect the China’s own wine industry and examine which factors influence the Chinese wine industry most. This study uses Constant Market Share (CMS) econometric model to analyze the influencing factors of China’s grain import fluctuation. The deep introduction on wine trade has important practical significance for the development of international trade and the improvement of industrial policies. The procured result of empirical model demonstrates that competitiveness is not always a predominant factor throughout the period, especially in wine industry