Changyu wine, a famous brand based in Shandong province, is displayed at one of its wineries at Yinchuan, capital of Ningxia Hui autonomous region. [Photo/China Daily]

"The plan is to turn Ningxia into a big grape growing region with boutique wineries," Hao Linhai, president of the International Federation Wines of the Helan Mountain, a government-backed association in Ningxia, said.

"One problem is that the region is still young. Most wineries are at the early stage of development. It takes patience, time and often many generations to build a great wine region," Hao added.

Li Chenguang, a wine expert who runs a private educational institute on the subject in Shanghai, echoed those views. At this stage, Ningxia has yet to develop its own signature style and taste. But the region is full of "possibilities" because of its climate and rugged terrain.

"There is no 'one size fits all' method in Ningxing," Li said. "The soil and the climate varies from one area to another within the region and there is huge unexplored potential. The area is full of opportunities and possibilities."

Increased funding and government policies that support the industry are also needed to improve the overall quality of wine production in the area.

"The government should set a certain threshold for producers, so they are qualified to enter the winemaking business," Li said. "Better classification techniques and regulations concerning brands of wine would also help."

For Wang, there are other major issues that need to be addressed, such as land policies and taxation. Vineyard and winery owners can only lease land from the government for between 20 to 30 years. That produces uncertainty when the lease has to be renewed.

High taxes are another problem. She pointed out that tax is pushing up wine costs, which can be 30 percent of the price of a single bottle.

Marketing and distribution are also major challenges facing the industry. Because of limited production, Ningxia vintages are rarely available in large supermarket chains and wine merchants in cities such as Beijing and Shanghai.

To overcome this challenge, Wang has teamed up with Summergate Fine Wines & Spirits for marketing and distribution in China. Her wines are priced between 150 yuan and 700 yuan a bottle. Gradually, they are appearing on the shelves of upmarket wine merchants and in five-star hotels.

"The biggest challenge for us is that you never know what is going to happen in the future and how many new things you will have to deal with," she said, declining to reveal detailed sales figures and financial data about her privately owned company. "And just because of that, I am never fearful of anything."

Wang Huazhong contributed to this story.