McDonald's Cranks Up Chinese Growth

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McDonald's (NYSE: MCD) may be slowing its store expansion in the U.S., but it's cranking up growth in China. In an interview with The Wall Street Journal today, McDonald's CEO Jim Cantalupo said the company is planning for around 100 new Golden Arches locations annually in China over the next several years.

With China's economy prospering, the country's long sought-after marketplace of 1 billion-plus consumers may finally be opening in a meaningful way to U.S. multinationals. Companies like Coca-Cola (NYSE: KO) have long cited China as a major growth avenue, but only recently has China's growth promise become a reality.

McDonald's, which first entered China in 1992, now has 566 stores in 94 Chinese cities, making the country McDonald's seventh-largest market by revenue. McDonald's Chinese operations are profitable, as well, according to Cantalupo.

Interestingly, McDonald's is not the largest U.S. restaurant chain in China. That honor belongs to KFC, owned by Yum! Brands (NYSE: YUM), which currently has more than 900 Chinese stores. KFC is purported to be planning for as many as 200 new Chinese locations per year for the foreseeable future.

Both McDonald's and Yum! Brands are classic examples of how investing in U.S. multinationals can be an effective way to get exposure to developing economies.