The management team enjoying the first batch of Coca-Cola produced at the Guangdong plant in 1983.
Courtesy Coca-Cola Co.
By Scott Cendrowski
September 12, 2014

Coca-Cola’s reentry into China was a minor revelation. In 1979, thirty years after the Communist Party’s takeover when foreign brands were kicked out, China’s economy was just starting to open. The symbolism of red and white bottles in Red China rang heavy: The country was announcing itself open to foreigners, foreign trade, and even a touch of capitalism.

At the same time, Coke (KO) was a mystery to an entire generation of Chinese when it reappeared just over 35 years ago today. It is a proud anniversary for a soda and company that never had it easy in the country. Since the takeover in 1949, when Coke’s bottlers were nationalized, Chairman Mao Zedong had openly derided the fizzy brown drink as a bourgeois concoction. Many Chinese only knew it from tales of a previous life, or, if they were lucky, the few remaining posh hotels where one could still find a bottle or two.

Like much of China’s economy in the late 1970s, the soda industry was provincial: Beijing had a drink called Arctic Ocean with polar bears on the bottle, Guangzhou had a Pearl River specialty, Qingdao another. The market was fragmented and largely unregulated. Coming off a lost bid for the Soviet Union, which rival Pepsi then controlled, Coca-Cola desperately wanted a piece of one colossal Communist country.

When Deng Xiaoping rose to power following Mao’s death in 1976 and spoke of a new open-door policy, the U.S. company’s reentry appeared a lot more likely. Behind the scenes, back-channeling had already begun. Coke was only a piece of it: President Jimmy Carter’s administration was busy establishing diplomatic relations with China at the same time.

When Coke finally broke into the once-closed economic backwater, no one could have predicted China’s three-decade rise. Nor could Coke have known just how hard things would be. Over the years, the company has been barred from selling for a year; forced to teach managers who grew up during the Cultural Revolution the basics of business; sold to consumers who said its signature drink tasted like traditional Chinese medicine; and partnered with governments who never wanted to see it succeed too much. How Coke turned China into its third biggest market (and what will surely become its largest any day now) is the story, told here in detail, of its time in the People’s Republic of China.

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