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.

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Ms. Mustacich’s palatably dry, matter-of-fact style is laced with wryly tart criticism of both the hidebound French and the corrupt and incompetent Chinese wine merchants. Her meticulously researched if sometimes complex account has a vast cast of colorful characters, from ancien régime château owners to startup Chinese wine makers, corrupt officials, arriviste Chinese investors, and the counterfeiters and those hunting them.

The Chinese have quickly found ways to induce some lesser châteaux to sign exclusivity agreements and to cut out the négociants. They have also sought to increase profits by buying dozens of châteaux outright, although there’s criticism of absentee and incompetent management. Meanwhile, French-trained Chinese wine makers look set to take over the under-$50 market, which is still safe for banqueting purposes and shows some life.

The weakness of traditional markets and the failure of Russia or India to acquire a taste for significant volumes of wine has left the great names of Bordeaux increasingly in thrall to the Chinese. No premier cru château has yet passed into Chinese hands, but it might be a matter of time.

However, as one of Ms. Mustatich’s wine-trader interviewees in Hong Kong points out, for most people in China wine is still just a commodity. “How many rich Chinese will open a bottle of wine at home? Zero. The problem is, we need the wine to be drunk.”

The Bordeaux wine industry’s glass is already, it seems, half empty.