As of now, no foreign companies are allowed to list in China’s domestic stock exchanges.  China had indicated earlier in 2009 that it would eventually allowed qualified foreign companies to list in Shanghai, with rules and regulations that have yet to be announced.

Currently, Coca-Cola share price ($68.75 as of July 7) is enjoying a gradual upward climb towards its record high of US$88 a share reached in 1998.  Chief Executive Officer Muhtar Kent is continuing the corporate strategy started by his predecessor E. Neville Isdell to refocus the company more on its core products, which include Coke, Diet Coke, and Coke Zero, rather than on its other noncarbonated drinks.  Kent also reconfigured serving sizes globally and introduced minicans and smaller bottles with new pricing to meet consumer demands and boost profit margins.  In 2010, Coca-Cola purchased its largest franchised bottler in Atlanta, essentially bringing it in-house to cut supply-chain costs, and giving the company control of 90% of its North American distribution.

As close to 80% of Coca-Cola’s sales are done outside the United States, Kent plans to spend at least US$27 billion through 2020 for new bottling and distribution facilities in emerging markets such as China and Mexico.  Last year, the company opened three bottling plants in the Inner Mongolia region at a cost of about US$246 million, part of the company’s three-year, US$2 billion expansion plan in China.  A Shanghai listing seems like a logical extension of Coca-Cola’s plan as it would provide access to China’s huge local currency deposits as well as increase the already strong brand value of the best selling soft drink in the world.

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Hong Kong and China continue to dominate global IPO activities in 2010. In 2009, Hong Kong was the world’s largest IPO market, with companies raising a combined $32 billion in capital, according to Dealogic, a data tracking firm with offices in London, Tokyo and Hong Kong. This year, China is on track to assume the lead, with a combined $40.1 billion raised from IPOs in just the third-quarter of 2010. This strength comes partly from Agricultural Bank of China’s (601288.SS) (1288.HK) record $22.1 billion offering in Shanghai and Hong Kong. The bank not only set a new IPO fundraising record, breaking the world record of $21.9 billion set in 2006 by Industrial & Commercial Bank of China, but also made up 42 percent of the total capital raised in IPOs globally.

China has long surpassed the United States in the amount of money raised from initial public offerings, underscoring the region’s stronger economy and resurgence in investments. According to Ernst & Young in a recent report, Shanghai, Hong Kong and Shenzhen were the world’s top three IPO markets in the third quarter of 2010 in terms of IPO fundraising.

The strong performances exhibited in these markets were not surprising as investors are looking to put their funds in high-growth companies with strong profit margins and a solid business model. The International Monetary Fund forecast 4.8% global expansion this year with the U.S. economy growing 2.6% and the euro-zone countries expanding 1.7%. At a time when the U.S. and European economies are still suffering the effects of the financial crisis, emerging economies are expected to grow 7.1%, led by China’s 10.5%. Investor appetite for IPOs in this region clearly reflects confidence about its long-term prospects. Another indicator of Asia’s economic rise has been China’s auto market, which eclipsed the U.S. as the largest in the world last year.

Companies from China now account for 6 of the 10 best performing U.S. IPOs so far this year. Shares of Chinese companies listed in the U.S. this year have posted quarterly returns of around 30%, vastly outperforming those from other U.S. and European companies, according to data from Renaissance Capital, a Greenwich, Connecticut-based IPO research center.

Among the top performing Chinese IPOs in the U.S. this year is JinkoSolar Holding Co Ltd (NYSE: JKS), which makes solar products such as silicon wafers, solar cells and solar modules, whose stock is up nearly 190% above its IPO price.

Chinese IT outsourcing company HiSoft Technology International Ltd (NASDAQ: HSFT) is up nearly 162% above its IPO price, and discount hotel chain China Lodging Group Ltd (NASDAQ: HTHT) has nearly doubled its IPO price.

Country Style Cooking Restaurant Chain Co. (NYSE: CCSC), a fast-food restaurant chain with an aggressive expansion policy, was a popular IPO priced at $16.50 in September, significantly above the estimated $12 to $14 range, is now trading up 76% its debut ADS price.

ChinaCache International Holdings Ltd (NASDAQ: CCIH) priced its IPO at $13.90 per American Depositary Share, above its estimated range of $10-$12. ChinaCache debuted in September 2010, offered 6.06 million ADRs, raising $84 million. Its shares soared to $30.70 soon after going public but dropped back down to $23.53 by the end of the 1st week of October. Last year, ChinaCache had revenues of $40 million and is on track to do between $60-$65M in revenue for 2010. Many analysts consider this to be one of the most successful deals of the year. ChinaCache is the largest content delivery network in mainland China where it holds a near monopoly with a 70% market share. Like Akamai or Limelight, ChinaCache offers to cache content such as Web data, video and applications in servers hosted in data centers distributed around China.

The offering came after the number of Internet users in China, the world’s fastest growing major economy, surpassed the entire U.S. population. China had an estimated 420 million internet users at the end of June, an increase of 36 million from 6 months earlier, according to data from the government-sponsored China Internet Network Information Center. The U.S. population is just 310 million and about 230 million Americans have access to the Internet. China has the largest Internet market, and it is growing in affluence everyday. Although the Internet is extremely congested in China, ChinaCache is well positioned to provide services required to relieve the many bottlenecks, paving the way for even more Internet usage.

SouFun Holdings Ltd. (NYSE: SFUN), the operator of China’s biggest property website, controls almost half of China’s online real-estate advertising market. jumped 72.9% ($31) to $73.50 in its debut during mid September at the New York Stock Exchange, posting the second-largest first-day gain for a U.S. initial public offering this year after raising $125 million selling shares at the top of its price range.

In summary, an anemic economic recovery in the U.S. and further financial problems in Europe are expected to further highlight China’s role as the world’s growth engine, in turn drawing more attention to Chinese companies with strong balance sheets. Encouraged by a series of successful deals as well as U.S. investors starving for high returns, more Chinese companies are expected to tap into the U.S. markets for funds in the coming months. At least 16 Chinese companies have registered with the U.S. Securities and Exchange Commission to raise around $590 million over the next 180 days, signaling a very positive beginning for a new IPO cycle.

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