Australian wine: what a corker!
Apr 20, 2018 (WiC 405)

Back in 2013 we interviewed ‘negociant’ and WiC reader Russell Badham about the China market, where he helps Australian vineyards sell their wine. He described the situation as “evolving quickly”, noting that selling white wine was something of a struggle versus the likes of dark-red shiraz.

Much has changed in five years and this week industry body Wine Australia announced that the country’s yearly wine sales to China had topped A$1 billion ($771 million) for the first time. Exports of Aussie reds and whites jumped 51% in the year to March 31, which helped wine exports to China reach a level more than double those to the US.

We had predicted in our Little Red Book special issues that a growing middle class would create a new market for mid-priced drinking wines and that Australia was likely to be the biggest beneficiary (the early stages of the wine boom in China were focused on expensive First Growths from Bordeaux such as Lafite and Latour). A drop in tariffs as a result of a free trade deal has also helped wine exports from the likes of the Barossa Valley and Margaret River too.

The leading exporter from Australia is Treasury Wine Estates, whose Penfolds range is the biggest selling Aussie wine brand in China, followed by the Rawsons Retreat range in second and its Wolf Blass series in fifth. Hence the milestone on sales to China is no surprise to Robert Foye, TWE’s chief operating officer (and another WiC reader). “Consumers in China have shown that they love the taste, heritage and quality of our Australian brands, including Penfolds, Wolf Blass and Rawsons Retreat.The future is bright for Australian wine in China,” he confirmed this week.

Tariffs on flamethrowers?
Apr 13, 2018 (WiC 404)

As Bloomberg has pointed out, “When you export half a trillion bucks worth of stuff to the US, there’s bound to be some unusual items in the mix.” The news agency and other media sources last week pored through the Trump administration’s list of Chinese imports which are set to be targeted with 25% tariffs. Among the hundreds of items there are quite a few that have people scratching their heads. Who knew that American consumers were buying items from China like flame throwers and fetal bovine serum? And in the age of Apple Music and Spotify it seems strange that the US Trade Representative’s Office thinks it is worth slapping tariffs on music cassette tapes – a product more associated with the 1980s. Other unusual items included on the tariff list: rocket launchers (if for private use), “haymaking machinery other than mowers” and nuclear reactors.

Bloomberg reported that the USTR said the list was compiled after analysts at US government agencies “identified items that benefit from Chinese industrial policies” or are “likely to cause disruption to the US economy”.

Plunging towards Earth
Apr 6, 2018 (WiC 403)

The prospects of an out-of-control Chinese space lab falling to earth have preoccupied segments of the Hong Kong and Taiwanese media for several months. Apple Daily has run regular articles speculating on the chances of the object hitting Hong Kong in a meteor-like fashion.

On Monday the Tiangong-1 – which means ‘heavenly palace’ – finally entered the Earth’s atmosphere and began burning up. However, Chinese space authorities have made clear the debris will land safely in the middle of the South Pacific, far from any urban areas. Zhu Jin, director of the Beijing Planetarium, told the South China Morning Post there was no need to worry that the eight-tonne space craft would strike a city. He said that the chances of anyone being hit by a piece of falling debris were lower than those of winning the lottery.

Tiangong-1 was launched in 2011 as a docking station to aid China’s rapidly expanding manned space programme (it was able to support up to three astronauts at a time for a two-week period). It officially went out of service in 2016 and was predicted to plunge back to earth sometime between March and April this year. The lab was designed for experiments, with China planning to launch a permanent space station soon after 2020.