Associated Press

HONG KONG — Government and Communist Party officials in China have been pounding down so much Moutai grain alcohol — the good stuff, the expensive stuff, not the everyday rotgut — that Prime Minister Wen Jiabao recently proposed slashing the state budget for it. It was a thoroughly shocking idea, like kicking lobbyists out of the halls of Congress or banning train strikes in France.

The Chinese government has been fueled for decades by Moutai, a brand of clear, powerful, sorghum-based liquor. In 1935, hunkered down in the mountains, Mao Zedong and his Long March guerrilla comrades used it to clean their war wounds and calm their nerves. In 1949, the new People’s Republic declared Moutai to be China’s “national wine.” In 1972, President Richard Nixon got glassy-eyed from Moutai toasts at a state banquet, ignoring fervent pleas from his aides to avoid the ceremonial toasts.

Moutai has long been the gift of choice for government and party bosses, and the bribe of choice for unscrupulous business executives. Among luxury brands now favored by mainland millionaires, Moutai is the only Chinese brand in the top 10 — ranked No. 5 after Louis Vuitton, Cartier, Hermès and Chanel. A poll by the Hurun Report found that Moutai carries more prestige than Apple, Rolex and Armani.

Moutai is merely the most popular brand in the baijiu family of China’s grain-based alcohols. Sales have reportedly been falling across the board recently — perhaps due to astronomical price increases and widespread, spot-on counterfeiting — although one brand, Xi Jiu, has been faring quite well. The rise and promise of Xi Jiu was spotted by Bill Bishop of the perceptive Sinocism blog:

Xi Jiu historically has been a mid-tier baijiu brand, but 2012 may turn out to be Xi Jiu’s year. Xi Jiu has two things going for it, in addition to having a name that is a homonym for 喜酒, or “wedding banquet liquor.” One, it may be more acceptable for bureaucrats to imbibe, if Wen’s crackdown is real. Two, and more important, the character for the “Xi” in “Xi Jiu” is the same character 习 as the surname of Xi Jinping 习近平, China’s presumed next leader.

Mr. Xi visited the White House in February, effectively presenting his credentials as the next head of the Communist Party.

Mr. Bishop said a friend told him the company was planning a heavy marketing campaign for Xi Jiu “to capitalize on the ascension of Xi Jinping. Part of the marketing pitch was that Chinese gift-givers and their official recipients would be clamoring for Xi Jiu by the 18th Party Congress in late 2012.”

Online traffic in China, according to Want China Times, has been speculating that “officials who want to climb the political ladder will drink Xijiu as a sign of their loyalty to Xi Jinping. They may even send Xijiu as a gift representing modernity and luck.”

Xi Jiu, also written as xijiu, is owned by a subsidiary of Kweichow Moutai Distillery, the maker of Moutai and the country’s biggest manufacturer.

A state-controlled enterprise, Kweichow is based in the town of Maotai, in Guizhou Province in southwestern China. In a recent filing the company said net profit rose in 2011 by more than 73 percent. A dividend in March was the largest ever in the history of the Shanghai stock exchange.

Baijiu, literally “white spirits,” remains hugely popular in China, with nearly 2 billion gallons consumed last year. And that’s just the official tally.

“Counterfeiters have grown so sophisticated at producing labels that they can even reproduce imprinted markings,” according to Asia Sentinel, which noted that knockoffs “can be produced by anybody with a still.”

The Kweichow distillery offers this online guide to detecting counterfeit bottles of its brand. The company uses holographic watermarks as one deterrent.

Andrew Jacobs of The Times reported from Maotai last year after retail prices for moutai inside China had approached $200 a bottle, a doubling in price in just two years. (The town of Moutai, making a hat tip to the Chairman, changed its name to Maotai after the revolution.)

“Chinese drinkers erupted in outrage, accusing the state-owned distillery of discarding its revolutionary roots to gouge the little guy,” Mr. Jacobs wrote. “It did not help when media reports revealed that the same bottle sold for half that much in the United States and Europe.

“I hear most of it gets delivered to Zhongnanhai,’’ said Wang Yonghui, 32, a bank teller and baijiu aficionado, referring to the Beijing compound that houses the country’s top leaders. ‘’We pay more, and they get it for free.”

The Chinese news magazine Caixin reports that cases of ultra-premium Moutai are routinely set aside at the Kweichow factory, reserved for the Great Hall of the People in Beijing, the navy’s North Sea Fleet, the telecom giant China Mobile and other well-placed tipplers.

For all of baijiu’s popularity in China — it compares to shochu in Japan and soju in South Korea — it is clearly not for everybody. Here’s how it’s described on 300 Shots of Greatness, a blog dedicated to the glories and understanding of alcohol:

The vileness of baijiu to the Western palate has the unfortunate side effect of alienating foreigners from their Chinese counterparts. Though in recent years a few of our drinks — most notably beer, whiskey and grape wines — have made significant inroads with China’s (mostly male) drinkers, baijiu remains the hands down favorite. If you want to drink with the Chinese, you have to suffer baijiu . . . or learn to like it.

If there’s little documentary evidence that Nixon liked his Moutai back in 1972, it clearly seemed to lubricate the sticky diplomacy of the era. His trip, of course, was a huge success.

And when Deng Xiaoping visited the United States two years later, Henry Kissinger told him, “I think if we drink enough Moutai we can solve anything.”