This paper explores recent developments in outward Foreign Direct Investment (OFDI) from Chinese companies in the wine sector in the Bordeaux (France) and West Australia (WA) regions. The objective is to explore the extent of the phenomenon, which although widely mediatized, has not been the subject of academic scrutiny. As OFDI official figures provide little detail, we undertook primary research in the two regions, in addition to analysis of secondary trade data.
Results indicate that the level of Chinese OFDI is relatively low, although the number and speed of acquisitions, especially in Bordeaux, has attracted attention. The motivations of investors in both regions were: the exploitation of growth in the home market; security of supply; prestige and diversification of risk. In Bordeaux the ‘appellation’ was a clear motivation, as were the vineyards’ historic buildings. A final motivating factor was the wish to avoid the complex supply chains in Bordeaux, by bringing wine direct to the Chinese market. In Australia, cementing existing business relationships, as well as access to Australian residency were specific motivations. Both regions have a relatively open investment climate and no significant investment barriers were noted, although the potential exists, especially as evidence emerges of illegal funding of some investments. We conclude with some directions for future research.