EDITORIAL: Coca-Cola's Plan: Is China Now More Capitalist than the U.S.?

HNN Staff
EDITORIAL:  Coca-Cola's Plan: Is China Now More Capitalist than the U.S.?

One huge economic story last week--and a sign of the times--came out of Atlanta.  Soda giant and American business icon Coca-Cola is looking closely at being listed on the Shanghai stock exchange as that main Chinese market begins to take steps to develop an international board.  Over the course of its long history, Coke has only been listed on the New York Stock Exchange.

According to the Wall Street Journal's Paul Ziobro, the Hong Kong Economic Journal had reported this possibility earlier, one that demonstrates the Chinese economy's potential going forward, at least in the minds of Coke executives.

"We continue to have positive discussions with Chinese government officials as we look at this opportunity," the company said in a statement, as reported by Ziobro.  He also noted that, last October, Coca-Cola opened three bottling plants in China at a cost of nearly $250 million.  That's just a downpayment, as Coke expects to invest a total of $2 billion in the country over the next three years.

That is a huge investment, one that has financial observers like Steve Forbes making the larger point that some American businesses are finding China, even with its corrupt Chinese communist government, a more business-friendly place to invest.

"I was just over in Hong Kong not long ago," said Forbes, on "Forbes on Fox" on Saturday.  "Who in 1997, when Hong Kong reverted back to the Chinese, would have guessed that today there are more IPOs in Hong Kong in New York City?"  IPOs, or "Initial Public Offerings," are the kind of common stock offering that Coke will be offering the Shanghai market if it decides to go forward with being listed there.

When a giant business and employer is willing to invest billions in a communist country, even seeking to be listed on their main stock exchange, it's a wake-up call.  Granted, an American business like Coca-Cola is expected to develop new markets internationally.  However, the regulations the Obama Administration continues to build against our business sector makes investments in places like China more alluring than ever.

The $2 billion Coke is willing to divert to China over the next three years won't be paying more American workers' salaries.  But it sure will make a great number of Chinese workers happy.  Have a Coke and a smile.

 

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