In the 1970s, Ningxia was regarded as an area with harsh natural conditions for human habitation due to severe droughts. By developing vineyards, it has turned into one of the world's best areas for winemaking, and the sector has contributed significantly to local poverty alleviation and environmental protection.

"In a fiercely competitive global wine market, it's critical for wineries in Ningxia to implement targeted measures, and further raise their competitiveness," said Li Jincan, an analyst at LeadLeo Research Institute, a market research provider.

"The wine industry is expected to promote the upgrading of the local economy and help farmers to become better off. The development of chateaus is also expected to drive the growth of the local tourism market," she said.

Last year, despite an unfavorable foreign trade environment due to the COVID-19 pandemic, the export value of wines from Ningxia reached 2.65 million yuan, up 46.4 percent year-on-year, according to Yinchuan Customs.

Xige Estate, one of the largest winemakers in the region, has maintained its export business to Switzerland and Canada despite the impact of the pandemic.

Meanwhile, French wine and spirits groups Pernod Ricard and LVMH-Moet Hennessy Diageo have established winemaking bases in Ningxia.

In 2020, Chinese consumers drank approximately 1.24 billion liters of wine, making China the sixth-largest wine consumer worldwide.