McDonald's said that rising car ownership and the burgeoning demand for western-style food has swayed it to open a new drive-through outlet in Shenzhen.
Earlier this week, the Illinois-based hamburger chain said that although recent sales had buoyed in the Asia-Pacific region, China has failed to perform to expectations.
Indeed, in its monthly sales brief for April, McDonald's said that there had been "positive performances" across Australia, Taiwan and Japan - with its Asia-Pacific, Middle East and Africa sales regions notching up a collective 1.6 per cent increase in sales. Conversely, global sales increased (on a constant currency basis) by 2.8 per cent.
China, however, partly offset this, despite the company revamping its menu (a strategy which has recently helped turn around its UK business), to include red bean sundaes, seafood and vegetable soup, and pork burgers, appearing alongside its traditional best-selling products such as the Big Mac and Chicken McNuggets.
Jim Skinner, McDonald's chief executive, said that the company plans to open a further 100 restaurants by the close of the year and will operate around 1,000 restaurants in the country by 2006 - putting it on a level playing-field with fast-food rival KFC (the company has 94 outlets in Shanghai alone, bringing the overall number to around 1,000).
Currently, KFC and McDonald's combined sales account for around 8 per cent (or US$1.74 billion) of China's US$21.7 billion fast-food sector.
Matthew Paull, McDonald's chief financial officer, said that although returns in the Chinese market were in double digits, there was much room for improvement.
"You have to remember that in places like Australia and Spain it took us 10 to 15 years to make money. China is in its 15th year and it's making very good money; it just could do better," he was quoted as saying in the UK's Financial Times.
Already the company has planned to invest more than half of this year's $1.7 billion capital expenditure budget (a 21.4 per cent increase on last year's $1.4 billion budget) into developing its Chinese operations and also those of other key markets, including Australia, France, Russia and the US.
Since beginning its Chinese operations in 1990, McDonald's has invested over US$200 million in establishing its own internal supply-chain (it owns around 52 Chinese farms) to sell to both the domestic and export markets.
Investments aside, however, the company has already established itself as an influential figure in the country's agricultural industry - in 2003, for instance, it purchased US$722 million of Chinese beef, potatoes, milk and vegetables.
