McDonald's has big plans for China

McDonald's Corp., the world's largest restaurant chain, may add as many as 200 stores in China next year to compete with Yum! Brands Inc.'s KFC Corp. for consumers in an economy that grew 9.6 percent last quarter.

The company plans to increase investment in China by 40 percent next year and to open 175 to 200 new restaurants in the world's fastest growing major economy, McDonald's said in a statement distributed at a briefing in Beijing today. That compares with a 25 percent increase in investment this year and the addition of 165 restaurants, according to the statement.

McDonald's, based in Oak Brook, aims to almost double its outlets by 2013 in China, where the company opened its first store in 1990. The fast-food chain established its first 1,000 McDonald's restaurants in China faster than in any other country outside the U.S. Tim Fenton, its president for Asia, Middle East and Africa, said in June.

China is the company's fastest growing market in terms of store openings, McDonald's said in today's statement. It operates more than 1,100 stores in China where it has invested 7 billion yuan ($1.05 billion). McDonald's aims to have 2,000 outlets in the nation by 2013, Fenton said.

The company earlier this year sold yuan-denominated bonds in Hong Kong to fund its expansion plans, becoming the first foreign non-financial company to issue such notes.

McDonald's last month increased prices for its burgers, drinks and snacks by 0.5 yuan to 1 yuan in China to offset costs after the country's inflation surged to a two-year high.

Industry wide sales at China's fast-food chains rose 12 percent last year to 60 billion yuan, according to Euromonitor International. Yum! led the market with a 40 percent share, more than double the 16 percent for McDonald's, the researcher said.