Though alcohol consumption has long been considered an integral part of China’s traditions, it has also gone through several periods of government regulation. Chinese history reveals that laws against wine production were enacted and repealed 41 times between 1100 BC and 1400 AD.
In the late 1980s and 1990s, the PRC government took measures to promote responsible and healthier drinking habits among Chinese consumers and reserve more grain for food consumption by encouraging fruit-based alcohol instead of grain-based alcohol. The government launched campaigns to encourage the consumption of grape wine and beer rather than stronger grain-based baijiu. In the late 1990s, the government also increased the tax rate for imported spirits, limited the import of high-strength alcohol into China, and refused to extend new production licenses for domestic and foreign spirits manufacturers—leading to a decline in China’s spirits market during that period. China’s 2001 World Trade Organization entry led to reduced import duties on foreign alcohol, and rising consumer demand led to increased imports and sales of imported spirits and wine.