Wang Yao, an official from the Information Department under the China Business Association, said his association, jointly with China Cuisine Association and China Restaurant Association, surveyed 3 million restaurants around the country.

According to their report, restaurant franchises are showing signs of strong development in the country.

Nearly half of the top-100 restaurant companies are utilizing the franchise business model, and their business earnings significantly surpass those of independently operated companies, Wang said.

The Tricon China Investment Co, which operates Kentucky Fried Chicken and Pizza Hut, the head of the top 100, also has the highest number of locations in China, with 459 outlets.

Malan Noodles Company opened the majority of Chinese style fastfood restaurants with 361 outlets.

The report indicated that those restaurants that are privately owned and operated are growing at the highest rate, constituting 95 percent of the total industry in terms of restaurant numbers.

Although the percentage of State-owned restaurants has narrowed in recent years, these establishments still claim a relatively large share of the market because of their advantages in preparation techniques, namebrands and reputation, according to Wang.

Among the top-100 restaurant companies in the industry, 24 are funded and owned by the State. Their business earnings are slightly higher than those of privately operated restaurants and significantly higher than those of joint-venture restaurants, Wang said.

The restaurant industry is especially growing quickly in medium and large cities, according to the report.

The top-100 companies are spread out in 24 of China's medium and large cities.

Among them, 14 are in Shanghai and 19 in Beijing.

Li Xihua, an expert from the Commercial Economic Research Center under Internal Trade Bureau, said the domestic restaurant industry will continue to see fierce competition and ask for the setting-up of more brandnames.

The heating-up competition in the country will phase out bad performing restaurants, Li said.

"To survive, many restaurants in the industry will adopt more modern marketing methods and new technology in cuisine making,'' he said.

The sector of family meals will be the focus of most restaurants since the common people now have more money to eat out, Li said.

China's restaurant industry has been expanding quickly in recent years, with more than 3 million restaurants and 10 million individuals working in the industry.

Last year, consumers spent a total of 375.3 billion yuan (US$45.3 billion) in restaurants.

The top-100 companies in the industry earned a total of more than 18.4 billion yuan (US$2.22 billion), 5 percent of the industry's total output last year.

Tricon China alone reaped 4.4 billion yuan (US$531.4 million).

The business earnings of Shanghai New Asia (Group) Co. also exceeded 1 billion yuan (US$120 million), the second of the top 100, the top of Chinese food restaurants.

(China Daily 08/02/2001)