AUSTRALIAN experts are being drafted to help the Chinese develop a massive wine industry that observers believe will eventually compete for export markets, challenging local vineyards on quality and price.

Experts who have made repeated visits as consultants report that the standard of Chinese wine has improved remarkably.

They say the climate difficulties that have hit some Chinese vintages are being overcome, with more areas under vines than in Australia, and the potential to produce large quantities of cheap wine using low-cost labour.

Steve Chapman, senior winemaker for Dorrien Estate in South Australia's Barossa Valley, has seen a big improvement in Chinese wine since he began advising the Huadong vineyard in Shandong province.

The original plantings of chardonnay grapes that produced China's first drinkable white wine at Huadong have been replaced with cabernet sauvignon and other red varieties to cater for market demand.

"The output in 1994 was 1000 tones, now it is 15-20,000 tones," Mr. Chapman said. "That is not huge, but it's developing at great speed."

Mr. Chapman returned from his recent consultancy at Huadong a month ago, after a decade of advising the Chinese-owned company on how to combat disease, when to pick grapes, the criteria for picking, production techniques and bottling.

"They're good listeners and they do tend to take your advice," he said.

"Since 1994 the wine quality has improved out of sight."

So far China had exported wine to some European countries, Mr. Chapman said, and competing with Australia one day was an obvious ambition.

Jonathan West, a lecturer in management at the University of Tasmania, said the construction of a faithful stone-by-stone replica of Tasmania's Government House north of Beijing by Chinese entrepreneur Li Chun Ming was a perfect metaphor that explained China's potential to replace Australian know-how and engulf its industry.

The Government House replica, near the city of Miyun, was built as a wine centre and conference facility after Mr. Li's syndicate was most impressed during a tour of Tasmania.

Mr. West said he had enjoyed Chinese wine - especially a brand called Great Wall - and wondered if Australian companies were short-sighted.

While local winemakers regarded China as an export destination for a growing middle class market, the Chinese made use of Australian expertise and could produce what Australia had to offer. "They may not have a natural advantage, but they have our knowledge and know-how," Mr. West said. "China can replicate what we do, and they're very good at that."

Judy Gifford, who worked as a traveling wine consultant in the 1990s, said China would "bust a gut" to export its wine, although the quality remained uneven.

Chinese authorities were reluctant to send students offshore to learn winemaking techniques, so hiring Australian expertise was in vogue, she said.

The ideal wine-growing areas for export potential were in the far western province of Xinjiang, she said. Companies there such as Suntime had the advantage of a mainly dry climate and large amounts of land. "It's difficult to keep up with the pace of planting - it's all hand-picked and it's cheap," she said.

Gary Baldwin from Wine Network said companies such as Dynasty were already thinking of exporting Chinese wine but had difficulty supplying their own market at this stage. "It's not as cheap as you might imagine -- a good bottle is the equivalent of $10 anywhere," he said.

Mr. Chapman, who has worked in China for the 1994, 1995, 2001 and this year's vintages, said he had seen a woman assistant at Huadong rise to become the company's chief winemaker. "The more they are learning the less you have to teach them."