Working Paper: CEPR ID: DP10552
Authors: Kym Anderson; Glyn Wittwer
Abstract: Over the past decade Hong Kong and China have become far more important to the world?s wine markets, while Southeast Asia?s imports of fine wine continue to grow steadily. This paper reviews recent developments in the light of comparative advantage theory before drawing on a model of global wine markets to project developments in Asia and elsewhere over the next five years under various economic growth, real exchange rate, and policy assumptions. It concludes that China is set to continue to be by far the most dominant player in Asia, and to change global markets for wines dramatically, just as it has been doing and will continue to do for so many other products.
Keywords: changes in tastes; global grape and wine model projections; real exchange rate changes; wine comparison advantage
JEL Codes: C53; F11; F17; Q13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Economic growth (O00) | Wine consumption patterns (L66) |
| Removal of tariffs in Hong Kong (F13) | Increase in market for ultra-premium wines (L66) |
| China's austerity measures (E62) | Luxury wine consumption (L66) |
| Economic development (O29) | Wine market expansion (L66) |
| Rising middle-class incomes (D31) | Wine imports (L66) |
| Mismatch between domestic production and rising demand (E23) | Surge in wine imports (L66) |
| Economic growth (O49) | Quality wine imports (L66) |
| Tariffs and market conditions (F19) | Wine consumption and trade patterns (L66) |