Red and yellow banners whipped in the wind and traditional Chinese lion dancers greeted guests at the opening ceremony for the brewery, which has an annual production capacity of 300,000 tonnes and began commercial production in February of this year.

The company will offer four brands in China, including Taihushui and Rheineck for the mainstream markets, as well as dark beer Carbine and premium beer Steinlager.China's beer market is flush with overcapacity and more breweries are coming on line, a situation likely to depress local market prices for a long time, industry officials have said.

But Lion Nathan officials said China's growing thirstfor beer would give the company solid prospects for growth. "The Lion Nathan board had the vision to realize the company's future growth lay not in Eastern Europe nor in South America, but here in China," said Lion Nathan's chief executive Officer Gordon Kairns.

Lion Nathan's chairman, Douglas Myers, said the company would focus on the Yangtze River delta area as its primary market. China's beer market is intensely competitive with over 700 breweries as well as falling consumer prices amid a slowing economy, he said. "The process of industry consolidation has already started," Myers said. "Those with a strong position, like ourselves, will stay."