It expects sales of its new line of ready-to-drink teas to grow by more than 10 percent a year in China, said Mickie Leong, general manager of Coca-Cola China Ltd's China Brand division.

"The non-carbonated sector is 60 per cent of the non-alcoholic beverage market in China," he said. The company's "Tianyudi" or "Heaven and Earth" bottled teas were the main "emerging drink" for the local market, he said in a recent interview. "This is a growth area," he said.

China's thirsty consumers drank 1.5 billion unit cases of non-carbonated drinks in 1997. A unit case contains 24 eight-ounce (233-millilitre) servings. China's slower economic growth is probably cutting the rate of expansion of the company's sales this year but the market isstill strong, Leong said.

Coca-Cola sold 323 million cases -- each containing 24 eight-ounce servings -- of all types of drinks in 1997, up 30 per cent over 1996. Sales rose 24 per cent in the first quarter of this year and 28 per cent in the second quarter, but third quarter growth was likely to be lower, he said.

Despite Coca-Cola's strong position in the market for carbonated drinks, the company has only about one per cent of the market for non-carbonated beverages in China, Leong said.

Its new drink, backed by an advertising campaign aimed at younger consumers, is designed to turn that around. Brewed from Chinese tea leaves, Tianyudi is given a dose of the company's own flavourings. The drink is being marketed in Oolong and Jasmine tea flavours and in sweetened and unsweetened varieties.

It was launched in Shanghai and the eastern city of Hangzhou last month. Shanghai is China's leading soft drink market, with per capita consumption of 80 eight-ounce servings a year, about four Times the Nationalaverage, Leong said.

Hangzhou, a medium-size east China city, is a popular tourist resort. Coca-Cola opened a $50 million bottling plant in Shanghai's Pudong area in March. But the facility bottles only carbonated drinks so Tianyudi is produced at a South China plant that specialises in non-carbonated drinks.

In the tea drinks market, Coca-Cola will have to take on the domestic competition as well as a big foreign rival, Suntory Ltd of Japan, which has already jumped in. In China's non-alcoholic beverage market overall, Coca-Cola has about a 30 per cent market share, Leong said.

Its main rivals for all non-alcoholic drinks are the local Chinese brand, Jianlibao, with about 15 to 20 per cent, and Pepsico Inc with about 10 per cent, said Lo Bing-chung, director of external affairs of Coca-Cola China Ltd.

Coca-Cola has 21 bottling plants in China and plans to add three -- in Taiyuan, Chengdu and Guilin -- in 1999. China sales accounted for about three per cent of Coca-Cola's global total, he said.