World Tea Expo Country Tour: 7 Things to Know About the China Tea Market

What to know, the education sessions to attend and some booths to visit at World Tea Expo to get the full view of what’s happening with tea in China today.

The Chinese tea industry continues to evolve. Shunan Teng, a tea educator and founder and CEO of Tea Drunk, a New York City-based teahouse, and Jason Walker, director of marketing at Firsd Tea offered insights into the influential factors impacting the Chinese tea industry, both domestically and abroad. These include: refocusing marketing strategies, sharing of production methods, the value of the Chinese yuan, climate change and more. “The tea industry is rapidly changing on the production side and on the consumer side,” said Teng, who is a World Tea Expo Origins Tasting Tour guide.

Today’s Market Factors

Production and marketing changes. Overproduction of some domestic Chinese teas occurred in the past, according to Teng. It began with a tea renaissance around the year 2006 that was a byproduct of China’s growing economy and burgeoning upper class. The tea renaissance reconnected Chinese people with their country’s historical tea culture and helped raise awareness of high-end teas in China. Marketing focused on China’s history and legends. However, much of the tea did not sell. As a result, the last five years have shown a trend in tea producers changing their marketing strategies, which include promoting the health benefits of tea, appealing to the everyday tea drinker and younger drinkers, and making teas more affordable. Tea tiers. The different tiers of teas are now more clearly defined between high-end teas and bulk mass-produced exportation teas, Teng said. Certain teas are specifically grown for the Chinese market and others are grown for the foreign market. Processing variations. Another development in China’s tea industry that Teng has noticed is a greater awareness among growers of teas and production methods from outside of their own regions. Previously, teas and production methods were more specialized by region, now there is more borrowing and utilizing of methods from other tea regions. For example, pressing tea used to be very characteristic of pu-erh processing and now the method is employed throughout China in making some white teas and low-end yellow teas. Other shared techniques include shaping and wok frying. Teng added there are more people who specialize in different specific stages of the whole channel of tea production. Climate change has impacted tea cultivation by causing unpredictable weather. “An irregular season is becoming normal now in China,” Teng said. “Farmers used to be able to predict seasons pretty accurately. For the past several years, no one can predict.” A season can start out warm and then a cold spell can hit certain areas causing tea buds to stop growing or die altogether. This year, the Yunnan province received hail and frost was a widespread problem throughout China. “Lots of tea trees were killed because of the coldness,” Teng said. There has also been excessive rain at times and no rain at others. “In the past six or seven years, you have tea that is picked as early as March 13 and as late as the end of March. So that is a big swing in the tea season.” Walker, who works at the American subsidiary of Zhejiang Tea Group, China’s largest tea exporter, said key factors impacting the Chinese tea industry are: the value of the Chinese yuan (RMB), the urbanization of China, and food safety standards and enforcement. Exchange rates. Six months ago, the exchange rate was around 7 RMB for one U.S. dollar, now it is at about 6.25 RMB for one U.S. dollar. “That has affected the profit cuts that exporters are feeling in China,” said Walker, who believes this may cause importers to pay a higher price for tea but the price increase will not necessarily be passed on to consumers. “It’s the middle man who is going to feel it more,” Walker said.

Chinese urbanization. By 2030, about 60 percent of China’s population will be in urban areas and the Chinese government is starting to offer incentives to slow that rate. China is making changes to its laws to allow renting out the management of land. “Larger agricultural management groups can get the rights to these lands and manage them and produce on a larger, more efficient scale,” Walker said. “So the small farmer can make revenue in a situation where they rent off their rights to these parcels of land to the bigger groups.” Labor concerns. Walker and Teng delved into the labor side of the tea industry. Tea workers in China are paid about 300 RMB per day (about $50 USD), while also being provided meals and transportation. This coincides with the improvement in labor standards in other sectors across China. Teng said a labor shortage in China has raised tea prices across the board.

Dive Deeper With These World Tea Expo Sessions

Get to know Chinese tea better by attending these World Tea Expo sessions. Origins Tasting Tour, including China, India, Sri Lanka and other countries,  8:30-5:15 June 12 in rooms 231 and 232. America, China and India—Innovation and Collaboration Between Nations to Produce Quality Tea in the United States panel, 11:30 a.m.-12:40 p.m. June 12 in room 228. Tea Brewing Techniques—Find the Right Style for You, 8:30 a.m.-12:30 p.m. June 13 in room 231. An Overview of Chinese Tea Making Techniques, with Shunan Teng, 11:30 a.m.-12:40 p.m. June 14 in room 228.

3 Not-to-miss Booths at World Tea Expo

Firsd Tea won the Global Tea Championship Judges’ Choice Award for its Toasted Puerfection iced tea blend, and the bronze medal for its Earl Grey blend, which will be in the Winners Tasting Circle at World Tea Expo. Firsd will be in booth 528. Baoshan Changninghong Tea Industry Group’s products are best sellers in the United Kingdom and other European countries. The pesticide residue and heavy metal levels fall beneath the limits set by the European Union. The company guarantees traceability and will be in booth 341. Guangxi Zunming Tea Co., Ltd. sources exclusively from gardens in which chemicals are well controlled. The company is the leading tea processor and exporter in Guangxi Province, China and will be in booth 323.