French wine has dominated the market for centuries, but now even the premiers crus are having to heed the new economic realities and look to the vinicultural upstart China for expansion.

It's only a few months since a Cabernet sauvignon from Grace Vineyard in China's third poorest region, Ningxia, beat some of the top French names in a tasting in Beijing. And He Lan Qing Xue's 2009 Cabernet blend, also from Ningxia, won at the Decanter World Wine Awards last year. This must have been as big a shock as when the Californians started winning gongs for Napa Valley's finest.

Now, Moët Hennessy is to develop a terroir in Yunnan province, in the Himalayan foothills, to produce a super-premium red for China's burgeoning wine-consuming elite. With its Chinese partner, Vats, the company will mainly grow grapes such as Cabernet sauvignon, Merlot and Cabernet franc, used to blend Bordeaux reds.

Speaking at a launch party in Zhongdian – a town now repackaged as Shangri-La to woo tourists to the Himalayan region – Christophe Navarre, head of Moët Hennessy, said: "What's important to produce a top-quality wine is the soil and the climate.

"The team spent a lot of time in China to find the right location to produce this top-quality red wine," said Mr Navarre. The wine will be grown on a 74-acre plot and should be ready in three or four years.

It has been a slow process, but China is slowly gaining attention as a viticultural player. The country is already the world's fifth biggest market, and it has quite a heritage in wine – archaeological digs have uncovered evidence the Chinese were making wine in 212 BC.