“Proper Divorce Saves Both Sides”: Foreign Partnerships, Coopetition and Industrial Upgrading in Chinese Wine

• In Event: Wine and Viticulture in East Asia: Changing Landscapes, Political Economy, and Global Shifts

Abstract

Multinational corporations and foreign investors have long flocked to China in hopes of accessing its rapidly growing market, so it is not surprising that they wield significant influence in the burgeoning wine industry. What remains unclear is the extent to these partnerships promote industrial upgrading that benefits Chinese producers. Drawing on fieldwork in eight wine producing regions, this research explores the varied trajectories of Chinese firms as they negotiate relationships with foreign and Chinese investors, experts, and winemakers. Because producers depend on promoting the legitimacy of Chinese wine, the industry benefits greatly from coopetition, whereby competing actors share information and resources, rather than protecting industry secrets. Indeed, we find that Chinese producers have benefited from foreign expertise and investment, while facilitating foreigners’ ability to negotiate local markets and institutions. On the other hand, many foreign-Chinese exchanges are temporary, through short-term contracts, increasingly independent partnerships, or severed ties. Foreigners often struggle with cross-cultural communication, made more complicated by a rapidly changing industry and shifting consumer preferences, but a short-term partnership may also provide sufficient technical expertise and local access for both parties. As one expert argued, “proper divorce saves both sides.”

Authors

• Cynthia Howson, University of Washington, Tacoma

• Pierre Ly, University of Puget Sound