Officials from the National Bureau of Statistics said that the sales volume of China's restaurant industry totalled 436.9 billion yuan (US$52.6 billion) last year, up 16.4 percent from the previous year and making up 11.2 percent of the nation's consumption as a whole.

"Its increase was 6 percentage points higher than the growth rate of the country's consumption, and considering the swift surge of demands for the restaurant industry, it will be one of the most promising sectors in China's tertiary industry," said Han Ming, chairman of the China Hotel Association.

Experts attribute the prosperity of the restaurant industry to individual incomes' increase, changes in people's ideas on consuming habits and the development of tourism sector.

Han also said restaurants' efforts to improve technology, create famous brands, upgrade service quality and launch new operations such as chain stores, online sales, centralized purchasing and unified distribution also played active roles.

According to the association, among China's top 100 restaurants, 41 operated as chains whose sales volume makes up 55.8 per cent of the top 100.

New methods have seen an increase in the catering business as well as reduced costs, he said.

Holiday consumption has also brought large business opportunities to the catering industry. In Wuhan, capital of Central China's Hubei Province, and Nanjing, capital of East China's Jiangsu Province, the business volume of catering companies witnessed 40 per cent and 23 per cent increases respectively during the Labour Day (starting May 1) and National Day (starting October 1) holidays last year compared with 2000.

Providing "organic food" has also become a new sales promotion method that has proved effective in attracting customers and expanding business.

The Second China Food Festival held last year provided opportunities for catering businesses to exchange techniques and service methods and develop more "green" and healthy foods among hotels and restaurants.

The establishment of the China New Dishes Research Institute last year took the Chinese catering industry to a new level.

Several old and famous restaurants, such as Beijing Quanjude Roasted Duck Restaurant, Hangzhou Zhiweiguan, Tianjin Goubuli and Shanghai Xinghualou, have taken the lead in developing traditional-style Chinese dishes and boosting business volume with new management methods.

"Further development of modern operation models such as chain operations and network sales is a key task for us," Han said. "Participating in community service should also be a priority."

Expansion of environmentally friendly restaurants is also a priority.

In addition, the association will help operators set up enterprise groups through mergers and acquisitions, and re-organization, which will sharpen their competitive edge as they compete with international giants.

The nation is among the largest catering markets in the world, and more and more foreign food companies plan to invest.

Friday's Restaurant Co Ltd, for example, opened its third American-style restaurant in Beijing late last year following the opening of its first in 1995 and second three years later, both of which are also in the capital.

According to a restaurant worker, it will continue expansion and plans to open one store a year in China.

Other food companies, such as Kentucky Fried Chicken (KFC), boast 475 stores in 121 cities in China with plans to open 120 new outlets this year.

KFC's biggest rival, McDonalds, has 377 outlets in 67 cities in China. The company has increased its market presence by investing in and establishing joint ventures with Chinese partners.

The food giant said it plans to open at least 100 franchised outlets each year in the country between 2003 and 2013.

(China Daily February 20, 2002)