“I bet you think we’re crazy,” said Jean-Guillaume Prats ruefully. The CEO in charge of LVMH’s project to make the best wine in China was looking at the rudimentary building site – many a hairpin bend above the Mekong River and four hours’ white-knuckle drive from the nearest airport – that will be Moët Hennessy’s winery and guest lodge. Tibetan women were working with pulleys and wheelbarrows. The electricity supply was far from reliable. We were at an altitude about 20 times higher than the highest vineyard in Bordeaux. Prats then resumed his interrogation of Stephen Deng, the estate director, as to whether the buildings could really be ready in time for the scheduled opening in September.

If they are not, it is Deng who stands to lose most face. While Bordelais Maxence Dulou is in charge of the vines and wines, Deng has to keep local government and other relevant bodies, all 23 of them, happy. On the day of our visit he was suddenly called away to meet a representative of one of them to reassure him that the project would indeed bring great prestige to this remote corner of the Himalayan foothills in Deqin county in Diqing prefecture, at the western limit of the province of Yunnan, 35km from Tibet’s border.

The story begins with a conundrum. China has a burgeoning future as a wine producer and consumer but all Chinese wine regions have one major disadvantage. They are either, like Shandong on the east coast, so wet in summer that it is a struggle to harvest fully ripe, healthy grapes – or they are so cold in winter, like Ningxia, where Moët Hennessy recently established a sparkling wine operation, that the vines have to be laboriously buried every autumn to protect them from freezing to death. Quite apart from the damage it can do to vines, the continuing urbanisation of China suggests that eventually this may become rather expensive. It was the fact that Yunnan is free of both these disadvantages that led me to ask Moët if I could come and see for myself.

Moët Hennessy had bought a producer of the Chinese spirit baijiu in 2007 and went on to see China become their most lucrative market overall. Thus they learnt how to operate joint ventures there and were keen to deepen their involvement in China’s famous thirst for alcoholic drinks. Accordingly, they gave Dr Tony Jordan, a wine scientist who had just stepped back from full-time responsibility for their Australian and New Zealand operations, four years to find a place where they stood the best chance of making world-class red wine. Jordan was keen to avoid the winter freeze problem and recommended the low-latitude-plus-high-altitude combination that has proved so successful for them in Argentina, which he eventually found in these tiny villages with a few vineyards in the far west of Yunnan. He narrowed down his search to the southwest after talking to China’s top wine academics and painstaking climate analysis.

From 1999 the local government had encouraged the Tibetan farmers here to switch from barley to vines on the few terraces flat enough for cultivation in the narrow upper Mekong and Yangtse Valleys, as part of a programme to develop remote parts of China. According to Deng, “The Deqin government persuaded some local farmers to plant 150 hectares of Cabernet Sauvignon, using subsidies to farmers as an economic incentive.” A winery named after the old Tibetan town of Shangri-La, which had previously focused on the very different liquid that is Tibetan barley wine, was persuaded to process the grapes in exchange for being granted a monopoly on all Yunnan grapes. (There is one exception to the monopoly: the Sun Spirit estate run by a local mining magnate a few miles downriver of the Moët project, whose sweet red and white wines fetch quite high prices in Beijing.) As so often, it was missionaries, French in this case, who originally brought the vine to the region, here a non-vinifera variety called Rose Honey that is still made into distinctly odd sweet reds by the province’s only other winery, Yunnan Red.

In a bid to lead China’s burgeoning wine-producing future, Moët Hennessy has set up a prestige wine operation in four virtually inaccessible villages

Thanks to the mountainous terrain, the vineyards here are all small and dispersed. After leaving climate sensors in all the villages he thought had potential, and returning to taste grapes during the 2011 and 2012 harvests, Jordan identified four villages he thought stood the greatest chance of growing good-quality grapes. After much negotiation, Moët have taken a 50-year lease on the four villages and the relevant farmers’ input, making a total of 30 hectares of vines – in no fewer than 320 different blocks. Much of Maxence Dulou’s time is spent liaising with the dozens of farmers involved, persuading them to focus on wine quality rather than grape quantity. Dulou, who has worked in South Africa, Chile and Burgundy, told me: “Tibetans are very good farmers and sometimes find solutions to our practical viticultural problems themselves. They make a very good team and are extremely proficient.”

Needless to say, the grapes are virtually all Cabernet, Merlot with a little Chardonnay, as is the unimaginative Chinese norm. But being grown at such high altitudes, between 2,200m and 2,700m, they have skins that have proved usefully thick for the long journey south to the Shangri-La winery where the 2013 grapes were vinified. This year, with luck, they will travel only as far as Adong, the highest village, where the winery and lodge are being built.

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Because Adong and the other three villages are so inaccessible, the winery has been designed to be practical: no fancy computers that may need spare parts or engineers shipped in. To reach it from Shanghai you have to fly three hours to Yunnan’s capital Kunming (where the rail station massacre took place earlier this year), then an hour over the mountains to Shangri-La, then four hours along the twisting road, avoiding fallen rocks and jockeying with trucks carrying Tibetan iron ore into China and pilgrims on their way to Lhasa. Each village is a hair-raising climb on tracks so rough I cannot imagine trucks full of grapes making it but locals must be made of stern stuff.

Adong is relatively lively, with people sitting outside the village café under flapping prayer flags, playing cards and waving as we passed in two white Land Cruisers. We also visited Shuori, the village thought to have the greatest potential for quality grapes. Moët has leased every vine they could get their hands on in this extraordinary settlement. There was no one to be seen and no sounds other than fast-flowing water and the hum of insects. Even though the vineyards were surrounded by substantial houses, all we saw were butterflies, walnut trees and promising, well-tended vines awaiting their spring growth. Perhaps the Shuorians were all off gathering mushrooms: Dulou has to vie with the profusion of funghi in these mountains when trying to recruit for the vineyards.

The mountainous terrain means the vineyards are small and dispersed

Although the nights in the mountains are cool, the upper reaches of the Mekong Valley have similar summer temperatures to Bordeaux. They are so protected from the cold and monsoons that affect Yunnan to the east that summer rainfall is only about two-thirds that of Bordeaux. But there is no shortage of potential irrigation water in terrain that is dramatically overlooked by the snow-covered Himalayas. Autumns are also drier, so grapes can be left to ripen on the vines longer. This will probably make up for the fact that, in such narrow valleys, the vines are in sunshine for fewer hours per day. And in the dry mountain air they are plagued by fewer pests and diseases than in Bordeaux.

There are advantages to the somewhat unlikely big company connection. Dulou’s chief viticulturist had just returned from a study trip to Moët’s Argentine operation Terrazas de los Andes. And when it came to making the trial vinifications of the first, 2013 vintage, Dulou was able to use the neutral earthenware jars traditionally employed by the company’s baijiu producer in Chengdu – once he had invented special floating lids for them that would keep harmful oxygen out of the wine to be fermented.

I tasted six lots of these experimental 2013 reds and was very impressed by five of them – quite an achievement since only a few days before I had tasted 53 of China’s better wines. They are first and foremost mountain wines, with the dense colour and vivid, finely etched flavours that you find in the high-altitude wines of Argentina or even in the best of Spain’s Ribera del Duero wines grown at a mere 300m or 400m. But the most exciting thing for me was that the oak influence on most of the samples was minimal. I tasted wines influenced by the pure vineyard characters, fully ripe but well balanced with real, confident, unique personalities of their own.

The project has no name yet, nor a definite launch date. No decision has been taken as to whether to launch with the experimental 2013s or to wait for the 2014s in which the Shangri-La winery will be involved as a transactional intermediary only, thanks to that monopoly agreement. But Dulou wants to retain at least some earthenware jar influence, as being a distinctly local ingredient. Not that in a landscape like this, both natural and human, there is any shortage of distinctive local character.

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Haute cuisine

We were 3,500m above sea level and across from us, on the far side of the valley through which the upper Mekong River runs, the snowcapped peak of Meili Mountain towered at 6,700m.

The Frenchman sitting next to me in the hotel was talking about two of my favourite topics, food and wine, but I was not paying much attention. Our view of the Meili, which is sacred to Tibetan Buddhists, was far too distracting.

A food stall outside one of Shangri-La’s three temples (Maxence Dulou)

Yunnan province, which has about 40m inhabitants, is still predominantly agricultural and the source of some remarkable foodstuffs. About 800 of the world’s varieties of mushroom are found here, including the matsutake so beloved in Japan. Foragers take off for days when the mushrooms are in season, searching across the high, unspoilt countryside. Ceps are plentiful too, as is an array of wild flowers. Pu-erh tea, a strong fermented brew found in Chinese restaurants around the world, is another Yunnan speciality.

But what makes Yunnan so exciting for the adventurous eater is not just its natural abundance. The province is home to 25 ethnic groups, each with its own distinctive way of cooking the native ingredients. The biggest group is the Yi (4.7 million), who enjoy a diet of corn, buckwheat, potatoes, beef, pork and mutton. Their favoured flavours are sour and spicy, and rice wine is integral to their meals. Pork is the central element in the diet of the Bai, who are also skilled in making pickles as well as bean and shrimp sauces. The staples of the Hani are rice and corn, while the Tibetans, the dominant group in the Shangri-La area, like air-dried beef and mutton with tsampa (roasted flour), yak butter, tea and barley wine.

The region’s natural attractions are drawing wealthy Chinese from Beijing and Shanghai to buy second homes here, rapidly forcing up the cost of new – often unsympathetic looking – property.

The Arro Khampa hotel (Jean-Guillaume Prats)

Travellers often stop in the remote county of Shangri-La, which was rechristened a few decades ago. Despite the new name, the reality of life here is not easy: the altitude takes getting used to, as do the constant wind, the dry atmosphere and the sharp drop in temperature at night. Our first dinner, at the Arro Khampa hotel, took place at a long low table, warmed by an open fire. The hotel is in the old part of Shangri-La that was devastated by a fire in January this year. This building, with its thick rammed-earth façades and intricate wooden carvings, survived intact.

We began with a revitalising bowl of pumpkin soup and plates of steamed and boiled dumplings. Brochettes of chicken wings, lamb, mushrooms and sweetcorn were then served from the grill alongside bowls of pungent chilli oil. The high-cheekboned Tibetan women who served us looked on with pride at our evident pleasure.

Yunnan’s mountainous terrain hosts 800 varieties of mushrooms and 25 different ethnic cooking styles

From Shangri-La we drove to Feilaisi, crossing a pass at 4,500m and beholding with every bend views that stretched to the verdant valley floor or the twisting main road from Lhasa, the pilgrimage route. Our reward as we clambered out of the car was the sight of the top of Meili Mountain, devoid of its usual cloud covering.

Dinner at the Regalia hotel was a banquet involving more than 15 courses served in less than an hour. No sooner had a darkly succulent pigeon broth been served than the lazy Susan in the middle of the table was laden with spicy pork liver; crisp, salted, fried insects; thin strips of pork belly; wild mushrooms; yam slices in a thick lemon sauce; and diced aubergine with shredded pork and peppers. Then came a small but thick yak steak, the meat a deep purple; a hot pot with vegetables; barbecued lamb; spare ribs; and a deep-fried cigar-shaped roll made from yak cheese filled with a red bean purée.

Dishes from the Shandong restaurant (Jean-Guillaume Prats)

The next day, after returning via the dramatic Lhasa road, we were back in Shangri-La. We navigated carefully down the streets – there isn’t much pavement and drivers pay scant attention to pedestrians – to lunch at the Shandong Savoury Wheaten Food Restaurant.

One room had half a dozen low tables with stools, while another housed a glass-fronted fridge stuffed with ingredients from the nearby market, and two large woks. A cook carried steaming plates of food to customers.

If the meal in front of Meili Mountain provided the most memorable view, this more mundane lunch was great value. For about £20 we enjoyed a lunch for eight that began with a chilli-laced cucumber salad and vast bowls of steamed and fried dumplings, making way for a huge plate of diced chicken with mushrooms and rice.

But what I will remember about all my Yunnan meals is the freshness of the ingredients – and the natural friendliness of the people serving them.