(WSJ) - The Chinese government helped unleash a thirst for fine wine, until a clampdown on corruption bottled up demand.

During China’s National People’s Congress in March 1996, then Premier Li Peng criticized the harmful effects of drinking harsh Chinese grain spirits and praised red wine. The result for the French wine industry was initially sweet, but with a sour finish.

“It was an unmistakeable signal to every official, state employee, and entrepreneur that red wine was approved by the Communist leadership,” writes Suzanne Mustacich in “Thirsty Dragon: China’s Lust for Bordeaux and the Threat to the World’s Best Wines,” a wide-ranging look at the Chinese wine market in which she reveals widespread skulduggery. The Wine Spectator contributing editor shows how the Communist Party’s new stance had unexpected consequences for some of the world’s finest wines.

Following Mr. Li’s speech, China’s wine imports soared. Even modest vintages attracted higher prices than in the West.

“For the most part, the Chinese had no idea what they were drinking. Enthusiasm for wine outpaced knowledge,” says Ms. Mustacich. The label, and the perceived value of the brand, was more important than the contents of the bottle.

In particular, the classification of Bordeaux wines, dating back to 1855, provided both an attractive historical authenticity and five clear levels of status. The Chinese understood that Château Lafite and its few Bordeaux peers, known as premier cru or “first growth” wines, weren’t for casual drinking.

But neither did they see them as wines for laying down to drink later. These wines were, rather, a medium for profit as prices rose, or high-value gifts for purchasing favors, or for giving and gaining respect.

The Lafite brand’s easily recognizable five-arrow mark commanded an ever-higher premium. “These Chinese collectors were new to wealth, they were new to wine, and they were obsessed with Lafite,” reports Ms Mustacich.

Bordeaux wines reach their markets through a Byzantine system. Wholesalers called négociants are kept at arm’s length from the châteaux by intermediaries called courtiers, who guarantee the quality and provenance of the négociant’s allocation.

For the classified wines of Bordeaux, an annual allocation is a matter of trust and proven reliability, and very difficult to obtain. The négociants take all the risk and develop markets for the wines they buy.

The sudden, rapid growth of Chinese interest came at a welcome time, as a financial recession was drying up the U.S. market. Large-scale, state-owned enterprises soon moved to maximize profit by buying portions of the négociants’ allocations.