The diplomacy of the wine industry between China and Canada

China has developed a taste for Canadian wine - representing a better trade relationship between the East and West.

The exports will help narrow our trade deficit, and the revenue will ease the recession's sting, though winemakers will have to take steps to stop counterfeiters from diluting Canada's prestige with inferior wines.

Canada has a long stanading relationship with China. In 1970, Prime Minister Pierre Trudeau was the first western leader to recognise the People's Republic of China (PRC) as a legitimate government, and later established diplomatic relations. However, while China remains Canada's second largest trading partner (after the United States), the relationship has cooled under the Harper government.

The recession seems to have changed Harper's attitude. Canada has a four-to-one trade deficit with China ($11.1 billionin exports and $39.6 billion in imports as of 2009). Diplomats from both countries have been making visits, the most recent being Ontario Premier Dalton McGuinty's Nov. 4 visit to Hong Kong. The growing Chinese middle class has been a great market for Canadian products, including wines.

"In general, there has been a change in Chinese taste," said Charles Burton, Professor of Chinese Politics at Brock University. In the past, rice wine has been China's dominant drink, but red and white wines have become more common. The taste for grape wines began at the top of Chinese society but has been "percolating down" to the middle and lower classes.

The increased popularity has created a demand for cheaper vintages. Wineries have appeared across China, but are of much lower quality. The inferior local wines, combined with the high tariffs on imported vintages, have brought out many counterfeiters."The counterfeiters have been playing off of Canada's reputation, there has been a lot of fake ice wine," said Burton.

The counterfeiters pose a serious problem to genuine vintages. Since the wines are of lower quality, they diminish the reputation that Canadian wines have built up. Since the tariffs mean that imported wines will always be expensive, a Canadian winery losing its reputation would be disastrous.

"Not only should wineries pursue technical excellence, but they should also become more adept at projecting the distinctive imagery that wineries in more established wine regions consistently project, and that sophisticated wine connoisseurs have come to expect from premium and ultra-premium wines," said a February 2010 report by Brock's
faculty of Business.

"The market is enormously important," said Burton. Canada has not failed to capitalize the opportunity.

Brock, for example, has been cooperating with several Chinese vineyards - exchanging technology and expertise - particularly in Shandong.

As a sign of the improving relationship, China gave Canada "approved destination status" in December 2009, meaning that Chinese residents can visit Canada as tourists. There have also been many Chinese students enrolling in Canadian universities, including 12,000 in Ontario, who collectively generate $1 billion in revenue.

The improving relationship has raised much criticism, however, with human rights advocates who decry China's infamous mistreatment of its dissenters, the arrest of an elderly Falun Gong practitioner being the most recent.

"Falun Gong practitioners are often held in separate facilities [from other prisoners] where they are compelled to relinquish their beliefs, including through torture and ill-treatment," said a report by Amnesty International.

Despite the criticism, the Canadian government has promised to continue improving its relationship with China. The government's Web site expresses optimism.

"Bilateral cooperation is strong - many Canadian government departments have productive cooperation programs and memoranda of understanding with their Chinese counterparts," as said on their Web site.