Coca-Cola is the all-American brand. In fact, Coke is among the most valuable and recognizable brands in the world. In dissing the US in favor of China, Coke CEO Muhtar Kent isn’t doing a Tom Friedman and wishing for an enlightened dictator to sort everything out. He just wants an American business climate that encourages competition and makes sense.
“They’re learning very fast, these countries,” he said. “In the west, we’re forgetting what really worked 20 years ago. In China and other markets around the world, you see the kind of attention to detail about how business works and how business creates employment.”
Mr Kent argued that US states did not compete enough with each other to attract businesses while Chinese provinces were clamouring to draw investment from international companies. Meanwhile, he said, China’s budget discipline and rapid economic growth made it an appealing place to set up operations.
I don’t read this as Kent saying China is perfect, just that we’re becoming too screwed up for our own good.
Mr Kent said that US tax burdens and political polarisation were creating uncertainty for businesses and hurting investment.
“I believe the US owes itself to create a 21st century tax policy for individuals as well as businesses,” he said.
Mr Kent, speaking on the sidelines of the Clinton Global Initiative conference, hit out specifically at US provisions that tax companies for repatriating cash earned overseas. Coke does not disclose how much cash it holds overseas.
“If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we’re disadvantaged,” Mr Kent said. “A Chinese or Swiss company can do whatever its wants with those funds [earned overseas]. When we want to bring them back, we are faced with a very large tax burden.”
Mr Kent said that US lawmakers, who have become stuck in political gridlock, need to be held more accountable as they debate ways to fix the economy.
Political polarization was much less of an issue before we elected a president who wanted to spread the wealth around and fundamentally transform America.