Pepsi's tie-up with Tingyi intended to pose a major challenge to Coca-Cola, Pepsi's major rival and the industry's top player. Coca-Cola says it will secure its position through investment and product development.

Pepsi's tie-up with Tingyi intended to pose a major challenge to Coca-Cola, Pepsi's major rival and the industry's top player.

David G. Brooks, the president of Coca-Cola Greater China, said, "Our basic value is to welcome healthy development and competition. Coca-Cola will continue to promote existing successful brands, while developing new products to cater to local needs."

The remarks come as Coca-cola opened its 42nd bottling plant in China on Thursday. The company is planning an additional investment of 4 billion U.S. dollars in the country. China is one of Coca-cola's fastest-growing markets, sales volume here soared 13 percent last year. Investors mostly shrugged off the challenge from Pepsi; Coca-cola shares were trading up about 1.5 percent in New York overnight.