The world’s obsession with matcha has created an unexpected new rivalry: Japan’s centuries-old tea tradition versus China’s rapidly expanding production machine.
What began as a global café and social-media trend has become a serious battle over supply, prices, branding and the future of one of Asia’s most recognizable tea products.
In Japan’s historic tea city of Uji, Kyoto, demand for premium matcha has exploded. At Horii Shichimeien, a centuries-old tea business, some tins now sell for nearly US$170, with prices reportedly three to five times higher than five years ago. Japan’s problem is no longer finding customers—it is producing enough matcha to satisfy them.
And that supply gap is creating an opening for China.
Japan’s matcha boom has become a supply crisis
Japan’s matcha industry has benefited enormously from the worldwide surge in demand for green tea powder, particularly in cafés, desserts and ready-to-drink beverages.
But matcha production is difficult to scale quickly.
The tea leaves used for matcha, known as tencha, must be grown under shade for roughly 20 to 40 days before harvesting. Premium matcha generally relies on the first spring harvest, after which the leaves undergo steaming, drying, stem removal and grinding. Traditional stone mills can produce only around 40 grams of matcha per hour.
That painstaking process is part of what gives premium Japanese matcha its reputation—but it also limits how quickly supply can expand.
Japan has increased tencha production substantially, reaching more than 6,200 tonnes in 2025, roughly three times the level a decade earlier. Japanese green tea exports, meanwhile, exceeded 12,600 tonnes in 2025, up 43 percent from the previous year, according to figures cited by CNA from Japan’s agriculture ministry.
Yet demand continues to run ahead of supply.
The shortage became particularly visible in 2025, when matcha prices surged and consumers in Japan and overseas faced tighter availability. Reuters previously reported that heat stress in Japanese tea-growing regions had also damaged yields, adding pressure to an already constrained market.
Then China stepped into the gap
China already has something Japan desperately needs: scale.
According to the China Tea Marketing Association figures cited by CNA, China produced more than 12,000 tonnes of matcha in 2025, accounting for about 70 percent of global supply.
China’s rapid expansion is especially visible in Guizhou province.
In Tongren, tea-growing communities have expanded matcha production with support from local authorities. More than 100,000 farmers in Guizhou are now involved in the matcha industry, while Tongren alone accounts for roughly one-fifth of China’s matcha production.
Chinese companies are also investing heavily in processing technology.
Machinery manufacturers in Tongren are supplying equipment to tea producers across China, with some machines costing about 40 percent less than imported alternatives. That makes it easier for additional tea-growing regions to enter the matcha business and increase production.
The Straits Times likewise reported that China is pursuing an aggressive expansion strategy, citing figures that put Chinese matcha production at more than 12,000 tonnes in 2025—around 70 percent of global output.
China may not need to beat Japan at premium matcha
This is where the rivalry becomes more complicated.
China does not necessarily need to replace Japan’s highest-end ceremonial matcha to become a dominant force in the industry.
Much of the global demand is for beverage-grade and culinary matcha—the powder used in lattes, ice cream, cakes, chocolates, desserts and other mass-market products.
That is precisely where China’s production model has an advantage.
Chinese producers can use large plantations, a bigger labor pool and industrial-scale processing to supply the enormous volume required by international food and beverage companies.
Japan, meanwhile, has a different weapon: origin and prestige.
Uji, Kyoto and other Japanese tea-growing regions have spent generations building reputations around cultivation techniques, craftsmanship and traceability.
For premium buyers, that reputation can matter more than price.
CNA cited London matcha café operator Raymond Wang, who said Chinese matcha he had sampled was good quality but that traceability and credibility remained important reasons for sourcing Japanese tea.
That creates a potentially powerful split in the market:
China can dominate volume. Japan can continue dominating premium positioning.
The biggest threat to Japan may be inside Japan itself
China’s rise is only part of Japan’s problem.
Japan’s tea industry is also dealing with an aging workforce, shrinking farmland in some regions and the long-term decline of traditional sencha consumption.
In Uji, tea producers face difficulties finding younger workers and leaf pickers. Meanwhile, some Japanese farmers are converting land from sencha production to tencha because global demand for matcha offers better economic opportunities.
That shift comes with a cost.
CNA reported that Japanese sencha production fell from more than 49,000 tonnes in 2015 to around 36,500 tonnes in 2025—a decline of more than one-quarter.
In other words, matcha’s extraordinary success could unintentionally reshape Japan’s entire tea industry.
A new battle over authenticity is already emerging
As Chinese production grows, another issue is becoming increasingly important: What exactly qualifies as Japanese matcha?
CNA reported that Japan registered “Nihon Cha,” or “Japanese tea,” as a protected name in July for tea grown and processed in Japan. The move could strengthen origin-based differentiation as international consumers become more concerned about where their matcha comes from.
That matters because the global matcha market is expanding far beyond traditional tea ceremonies.
Consumers increasingly encounter matcha in coffee shops, bakeries, supermarkets and restaurants. The product is becoming less about a single Japanese beverage tradition and more about a global ingredient.
And that changes the economics.
If consumers are buying matcha for a latte or dessert, they may be less willing to pay a premium for an extremely labor-intensive product from Uji.
But if they are buying matcha for its heritage, provenance and ceremonial quality, Japanese origin may remain a powerful selling point.
The matcha war could ultimately create two winners
The emerging Japan-China competition should therefore not be viewed as a simple fight in which one country eliminates the other.
China has the scale to help satisfy an exploding global appetite for matcha.
Japan has the history, premium reputation and origin story that helped turn matcha into a globally desirable product in the first place.
The two strengths are almost perfectly opposite.
China can make matcha cheaper and more available.
Japan can make premium matcha more exclusive and valuable.
That could eventually produce a two-tier global market: mass-market matcha increasingly supplied by China, and premium origin-driven matcha led by Japan.
But there is one major question hanging over the industry:
If China can eventually match Japan on quality while maintaining its huge production advantage, will “Japanese matcha” still be enough to justify the premium?
That is the question that could determine who truly wins the next chapter of the global matcha boom.
And for Japan, the clock may already be ticking.
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