In a portent of what may happen after China enters the World Trade Organisation, the state is selling its most famous soft drink brand to a Singapore company. Reports in the official press yesterday say the government of Sanshui in Guangdong will this week sell a controlling 45 per cent stake in soft drink maker Guangdong Jianlibao Group to Singapore's Tee Yih Jia Food Manufacturing for 380 million yuan (about HK$362.9 million). Sanshui chose Tee Yih Jia, one of Singapore's biggest food companies, from at least five competitors, including French food giant Danone. The sale represents the death of China's hopes of building an independent brand to fight Coca-Cola, Pepsi-Cola and popular Taiwan brands in a mainland market worth about 40 billion yuan a year and growing by an annual 12 per cent to 14 per cent. Jianlibao's namesake main product is a carbonated orange drink which competes directly with the two colas. It also sells Orange Honey, Lemon Honey, Litchi Honey, Tianlang Distilled Water, Lots Cola and natural fruit juice. The company was established more than 20 years ago and at its peak in the early 1990s was a national brand active in advertising and sports sponsorship. Yesterday, the 21st Century Business Herald gave a detailed account of the negotiations. It said the Sanshui government, which held 75 per cent of the company, was going ahead with the sale despite the bitter opposition of founder and managing director Li Jingwei and the other top managers who had offered to raise about 450 million yuan and buy the stake themselves. 'Jianlibao is a state company, it is the government that is the largest shareholder,' was the response of the Sanshui authorities. Sales this year are less than half last year's two billion yuan level, and account for less than 5 per cent of the mainland beverage market. Jianlibao's decline is the result of several factors - its inability to compete with rivals in sales, marketing, advertising and distribution, its failure to raise sufficient capital, the limitations of a state-run company and investing more than a billion yuan in a headquarters building, money that should have been spent elsewhere. Another reason was its failure to develop new products and new sources of profit and refusal to go into foreign joint ventures. The management and the city government each blamed the other for Jianlibao's difficulties, with this acrimony making a bad situation worse. On June 19, Sanshui city raised its stake in the firm from 60 to 75 per cent by spending 45.2 million yuan to buy a 15 per cent sake from Guangdong International Investment at an auction where last year's sales were put at 2.65 billion yuan and net assets at 850 million yuan. The terms of this week's sale to the Singapore company are not clear, especially whether it is taking over Jianlibao's debts - said to be about two billion yuan. Soft-drink making was one of the earliest sectors of China's industry to be opened to foreign investment and Coca-Cola and Pepsi-Cola between them account for more than 50 per cent of the market.