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Regional Competitiveness and Future Perspectives of Wine Production in China

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Regional Competitiveness and Future Perspectives of Wine Production in China Departamento de Economía Agraria, Estadística y Gestión de Empresas Escuela Técnica Superior de Ingeniería Agronómica, Alimentaria y de Biosistemas Universidad Politécnica de Madrid Regional Competitiveness and Future Perspectives of Wine Production in China Tesis Doctoral Autor Yuanbo Li Máster en Economía Agraria, Alimentaria y de los Recursos Naturales Madrid 2017 Departamento de Economía Agraria, Estadística y Gestión de Empresas Escuela Técnica Superior de Ingeniería Agronómica, Alimentaria y de Biosistemas Universidad Politécnica de Madrid Regional Competitiveness and Future Perspectives of Wine Production in China Tesis Doctoral Autor Yuanbo Li Máster en Economía Agraria, Alimentaria y de los Recursos Naturales Directora Isabel Bardají De Azcarate Doctora Ingeniero Agrónomo Madrid 2017 Tribunal nombrado por el Sr. Rector Magfco. de la Universidad Politécnica de Madrid, el día ……… de …………………. de 201… Presidente: ………………………………………………………………………… Vocal: ……………………………………………………………………………… Vocal: ……………………………………………………………………………… Vocal: ……………………………………………………………………………… Secretario: ………………………………………………………………………… Suplente: ………………………………………………………………………… Suplente: ………………………………………………………………………… Realizado el acto de defensa y lectura de la Tesis el día …… de …………. de 201… en la E.T.S.I./Facultad ………………………. Calificación …………………………………………. EL PRESIDENTE LOS VOCALES EL SECRETARIO “La Naturaleza Humana Es La Misma En Todas Partes: Sólo Las Formas Son Diferentes” Lord Chesterreld “De Quien Más Aprende Es De Quien No Sale Nada De Lo Mío” ACKNOWLEDGEMENTS First of all, I want to give a special acknowledgement to my supervisor Professor Isabel Bardají Azcárate, who contributes a lot in the academic field and in the university, for her kindness and supervision during my study of Máster en Economía Agraria, Alimentaria y de los Recursos Naturales and Doctorado en Tecnología Agroambiental para una Agricultura Sostenible (TAPAS). I’m also grateful to all the Professors who taught me patiently in my Master in Economics Applied to Agriculture, Food and Natural Resources. They are Professor Alberto Garrido Colmenero, Professor Ana Iglesias Picazo, Professor Ana Velasco Arranz, Professor Eva Iglesias Martínez, Professor Isabel de Felipe Boente, Professor Luís Ambrosio Flores, Professor José Luis López García, Professor José María Sumpsi Viñas, Professor Julian Briz Escribano, Professor Maria Blanco Fonseca and Professor Silverio Alarcón Lorenzo. I will give sincery thanks to many Professors in the Department of Economía Agraria, Estadística y Gestión de Empresas and the Centro de Estudios e Investigación para la Gestión de Riesgos Agrarios y Medioambientales (CEIGRAM). They are Professor Ana María Tarquis Alfonso, Professor Arturo Serrano Bermejo, Professor Aurelio Villa Pérez, Professor Carlos Gregorio Hernandez Diaz-Ambrona, Professor Consuelo Varela Ortega, Professor Irene Blanco Gutierrez, Professor María Gómez del Campo, Professor Maria Ines Minguez Tudela, Professor Paloma Esteve Bengoechea, Professor Teresa Briz De Felipe, Professor Vicente Sotes Ruiz and many other Professors at the Escuela Técnica Superior de Ingeniería Agronómica, Alimentaria y de Biosistemas. I would like to appreciate Mr. Angel Alvarez Rodriguez, Ms. Begoña Cadiñanos Martínez, Ms. Carmen Dieguez Martinez, Ms. Esperanza Luque Merelo, Ms. Isabel Peregrina, Ms. M. Elena Torcal, Ms. M. Luisa Escribano and many others Staffs who have help me and dedicate themselves to the Universidad Politécnica de Madrid. I I’m very thankful to Alejandro Blas Morente, Ana Felis Rota, Berta Sánchez Fernández, Chenli Zhang, Christian Franco Crespo, Cristhian Antonio Vega Quezada, Edna González Alatorre, Javier Castaño Mirón, Luis Sanchez De Pazos, Marilyn Muñoz Mayorga, Marina Martínez Ríos, Maritza Satama Bermeo, M. Pilar Martinez Muñoz, Omar Valverde Arias, Otilia Vanessa Cordero Ahimán, Renato Jacome, Rhys Manners, Sandy Baldeon, Sol García-Germán and many other Partners in the department and CEIGRAM. I give many thanks to Cateryn Hernandez Heredia, Felipe Martínez Hermosilla, Giacinto Guglielmi, Joaquin Andres Bautista, Vanessa Agreda, Víctor Hugo Lema Collaguazo, Xia Huang, Yohansel Perez and many other Partners in my Master study. As well, I extend my gratitude to so many People who taught me and help me during my study and life in Spain and many other places in the world. Finally, and most importantly, I dedicate my love to my family and the world we live in! II SUMMARY China has a long history of grape cultivating and wine making, which can be tracked back to thousand years ago. Nowadays, after a rapid economic growth of thirty years, China has become one of the world's largest wine-consuming markets with great growth potential. At the same time, we cannot ignore the fact that China is an important wine producer as well. In recent years, both the vineyard area and wine production have increased dramatically in China owing to the increasing domestic demand, improved life-standard and improved technologies and matured management experience in the area of viticulture. In the meantime, the international wine market is vigorously competitive. Hence, there is a need to consider the potential of China's domestic production to satisfy domestic demand and even the competitiveness in the international market. With this goal, this Thesis provides four questions: 1. What is the competitiveness of Chinese wine industry compared to the main wine producing countries in the world and how has it evolved historically? 2. Considering the huge size as a country and local diversity, what are the main factors of regional competitiveness and how is the regional competitiveness of wine production in different wine regions in China? 3. Facing the influence of climate change of both challenges and opportunities, what are the possible effects on regional competitiveness and adequate adaptive measures? 4. What are the internal and external factors which shape the wine industry and wine market in China and what kinds of strategies can contribute to the further development of the wine industry in China? To answers these four questions, the specific objectives of this thesis are as following: 1. To analyze and determine competitiveness of Chinese wines in a global scenario. 2. To analyze the regional competitiveness of local wine industries and factors which contribute to its determination. 3. To study the impacts of climate change on the wine production in China and provide adaptation strategies. 4. To analyze determining factors and provide adequate strategies for the development of the Chinese wine industry. To support this study, several methods have been adopted like literature review, statistical analysis, market competitiveness analysis, Porter’s Diamond Model and industry competitiveness III analysis, climate change scenario analysis, climate change adaptive capacity analysis, and SWOT and SWOT Matrix analysis. Overall, the results of this study provide scientific implication on the research of evolution and perspectives of China’s wine industry from several aspects like historical, social, industrial, commercial and cultural variables. Even though China has dramatic expansion in domestic vineyard and increase in grape and wine production, compared with other countries, the competitiveness of Chinese wine production is still low with small export wine value and volume but the competitiveness general has been improved in a small scale in recent years. Wine producing regions are across the whole nation with diverse natural and social conditions. According to the Porter’s Diamond Model and the theory of industry competitiveness, Xinjiang has the highest competitiveness of Factor Condition; Beijing possesses the strongest competitiveness of Demand Conditions; Xinjiang ranks the first of Related and Supporting Industries and Shandong is the first in relate to Firm Strategy, Structure and Rivalry. For the Total Competitiveness, Shandong has outstanding advantages. For climate change, a general tendency of increasing temperatures and accumulated temperature, water scarcity with increasing number of frost-free days and higher frequency of extreme events, all of which will bring both challenges and opportunities to the young Chinese wine industry. Climate change adaptive capacity of Chinese wine industry is analyzed and adaptive strategies are provided at policy, financial, technical, institutional and collaborative level. According to SWOT and SWOT Matrix theory, 6 internal factors for Strength, 9 internal factors for Weakness, 9 external factors for Opportunity and 7 external factors for Threat, considering both traditional conditions such as wine production, wine policies as well as new conditions such as e-commerce, climate change and domestic economy trend, have been achieved in four sectors- Grape Producing, Wine Processing, Wine Selling and Wine consuming- of wine industry in China. For the further development of Wine industry in China, 8 strategies such as government support and establishment of wine laws at governmental level, 5 strategies such as a diverse and sustainable development at industrial level and 4 strategies such as broadcast of wine knowledge at business level have been provided. IV RESUMEN China tiene una larga historia de cultivo de uva y de elaboración de vino, que tiene su origen hace mil años. Hoy en día, tras un crecimiento económico acelerado de treinta años, China se ha convertido en uno de los mayores mercados consumidores de vino, con un gran potencial de crecimiento. Al mismo tiempo, no podemos
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