Coca-Cola had been available in China since the early 20th century, when bottles were first imported from Coca-Cola’s manufacturing base in the Philippines.

The American soft drink was advertised by Shanghai restaurants catering to foreigners, such as Sullivan’s, in as early as 1916.

It was only in the 1920s, however that the Coca-Cola Company appointed official retailers and then bottlers in China’s largest treaty ports - the Watson’s Mineral Water Company in Shanghai and the Crystal Mineral Water Company in Tianjin. Later, the Laoshan Mineral Water Company was added in the northeastern coastal city of Qingdao. 

While initially Coca-Cola was primarily sold to the Western population of the foreign concession areas, it eventually also became popular among the locals, driven by massive advertisement and marketing efforts started after 1930, when the special representative for the Coca-Cola company, P.S. Lewis visited Shanghai.

By 1933, Watson’s operation in Shanghai already ranked as the largest Coca-Cola bottling plant outside of the United States. 

After the outbreak of the Second Sino-Japanese War, domestic production fell drastically because of the lack of imported concentrated syrup, but it was not until December 1941, when the Japanese invaded Shanghai’s International Settlement, that Watson’s Coca-Cola output dried up completely.

The entry of the United States into the war, however also led the brand to one of its biggest publicity stunts: 

 In 1941 Coca-Cola’s president Robert Woodruff ordered "to see that every man in uniform gets a bottle of Coca Cola for 5 cents, wherever he is and whatever it costs the Company.”

By the end of the war in late 1945 over 100,000 American military personnel was stationed in China, and the increasing numbers of Americans who were used to regularly drinking Coca-Cola soon became living and moving advertisements for the brand.

Particularly in Shanghai, the visual impact was powerful, since one of the largest American military bases in the Far East was located there.

To meet the tremendous demand in the wake of the victory over Japan, Watsons soon re-opened and expanded its bottling facilities, equipped with the latest and most advanced machinery imported from the United States, which could produce up to 120,000 bottles per day.

For ordinary Shanghainese, Coca-Cola had once again become an omnipresent visual part of their lives, with Coke advertisement billboards and signs almost literally on every street corner. 

Coca-Cola’s indoor advertising was equally, if not even more, marvelous than the outdoor campaigns. Flyers and posters featured upper-class Shanghai models as well as American pin-up girls, demonstrating a special taste for modernity. To attract more customers, the Coca-Cola Company generously distributed free souvenirs such as bottle openers, stationery, coolers, and calendars, printed with catchy Coca-Cola trademarks. 

To further extend the influence of the Coca-Cola brand, Watson’s actively supported various special events such as sports contests, picnics, outings, fairs, exhibitions, and carnivals at which Coca-Cola was sold. 

This takes us to the most remarkable event that Coca-Cola sponsored in postwar Republican China and where our advertisement originates from:

The Seventh National Games (第七届全国运动会), hosted in Shanghai during May 1948. 

Modelled after the Olympic Summer Games, it was the first Chinese National Games after the war and the number of participating teams and athletes was the highest in history. Among them, seven were overseas Chinese teams, including from Hong Kong, Indonesia, Malaysia, Saigon, Siam, Honolulu and Toronto.

In total, nearly 2,400 athletes took part in the spectacle.

At the main venue the most conspicuous sign in the stadium was not the flaming torch or the rostrum, but huge red Coca-Cola flags flying in each of the corners.

Chinese newspapers reported that “the flags seemed like four guardian warriors standing in a Buddhist temple”. It was almost impossible for press photographers and cameramen to cover the track and field contests without also capturing one of the prominent Coca-Cola banners. 

The outdoor pool for Olympic swimming and diving as well as the indoor stadiums for e.g. basketball also had strategically placed Coca-Cola advertisement signs. 

During the games, Coca-Cola was the only drink served to referees and administrators. At the end of each volleyball game, the police chief kept shouting to his assistants: “Deliver Coca-Cola immediately!”

When the game was broadcast on the radio, each segment was followed by the advertising slogan “This programme is sponsored by Coca-Cola”.

The increasing influence of American culture abroad, combined with extensive local marketing efforts such as the National Games sponsorship, finally produced rewards for Chinese bottlers.

By 1948 Shanghai became the first market outside the United States to post annual sales of more than one million cases of Coca-Cola.

But eventually the postwar deluge of American products, which was soon labelled “Coca-Colonization”, was considered not only a political threat to social peace and stability, but also a heavy blow to national industries around the world. 

In China the Communist Party and its allies criticized America’s unilateral aid to the Nationalist Party, claiming that it exacerbated internal conflicts and escalated the civil war.

National entrepreneurs blamed imported American products for the bankruptcy of national industries and massive postwar unemployment.

After the full-scale civil war finally resumed in 1946, the Communist Party and its allies started a National Products Movement with the slogan “Use Chinese goods and boycott American products” to protest against the bulk sale of American surplus property.

In the soft drinks industry, where Coca-Cola had put all domestic brands in jeopardy, nationalistic enthusiasm was particularly strong.

As the National Products Movement escalated in 1948, the antipathy towards Coca-Cola increased to the point where the Chinese business community called for the boycott of the drink due to unfair competition. Soon after, the resolution was sent to the Shanghai Municipal Government for review.

But just before a decision was made, Watson’s wrote an open letter that pointed out that because of the prosperity of their Coca-Cola business, the company paid the largest amount of commodity tax in the industry—up to 140 billion yuan in June 1948. Their partners, including distributors and retailers, also paid a considerable amount of business taxes and banquet taxes, estimated to be a total of 250 billion yuan in the same month.

Long story short, the 1948 Shanghai Coca-Cola crisis was eventually resolved and Watson’s was allowed to continue production, although only for a few more months: After the establishment of the People's Republic of China on October 1st 1949, the new Communist government sought to eliminate Western capitalist influences, viewing them as remnants of colonialism. Consequently, foreign enterprises, including Coca-Cola, were expelled, and their assets were nationalized. Even the sale of the beverage as a symbol of Western imperialism was prohibited. During this period, Coca-Cola became emblematic of American capitalism and was often criticized in state propaganda as a symbol of cultural aggression.

It wasn't until the late 1970s, with China's shift towards economic reform and opening up under Deng Xiaoping, that Coca-Cola was permitted to re-enter the Chinese market.

In 1979, following the normalization of Sino-American relations, Coca-Cola signed an agreement to sell its products in China, initially targeting foreign visitors and later expanding to the general populace again.