CHATEAU Lafite Rothschild, a French wine estate that produces the world's most expensive wines, has started construction of its first Asian production base in east China's Shandong Province.

Domaines Barons de Rothschild, Chateau Lafite's parent company, has teamed up with CITIC, China's largest state-owned investment company, to build the base in Penglai, a city on the easternmost tip of the province, which is known as one of China's largest wine-producing areas.

A ground-breaking ceremony was held on Sunday, Cong Yanpeng, head of the city's wine bureau, said yesterday.

With an initial investment of 100 million yuan (US$15.87 million), the base is designed to cover about 1.73 hectares and will include a winery, a vineyard and other facilities, Cong said.

It is not yet known when the construction will be finished.

After visiting many regions in Asia over the past 15 years, Chateau Lafite finally chose Penglai for its advantageous climate and geographical conditions, said Eric Kohler, Lafite's technical director.