It's dinnertime and people are lining up to order full trays of cheeseburgers and French fries in a McDonald's on Dongdan Street, a major Beijing shopping artery.

Guo Zhenhua, the duty manager, busily greets and guides customers with a welcoming smile as people pour in the restaurant.

As global economic prospects grow dimmer and consumer confidence sinks to record lows, people are cutting spending on high-priced, fancy restaurants and the world's largest fast-food chain is taking advantage.

"At the busiest time of day we have five cash registers working at once, just to keep the line short," said Guo. "The worldwide financial crisis seems to have no detrimental impact on our sales."

The fast-food giant announced an 11 percent rise in its third-quarter net income, with most of its higher sales coming from its business outside the United States. Emerging economies such as China remain the company's fastest growing market outside the US.

"We are operating from a clear position of strength," McDonald's China CEO Jeff Schwartz told China Daily. "In spite of economic and financial concerns around the world, McDonald's business in China is growing."

McDonald's opened it's 1000th outlet in China in Dongguan, Guangdong province in November and plans to add 175 new Chinese outlets this year. The company said the 2009 plan will create 10,000 restaurant jobs and 1,200 manager positions.

The company is also accelerating its eastward expansion by increasing spending on new stores in Asia, the Middle East and Africa by at least 20 percent to US$360 million.

McDonald's profits are growing worldwide, but concerns remain that the financial crisis may slow the franchising process since franchisees eventually might not be able to get start-up loans.

Carbonated soft drinks companies are another potential concern for McDonald's. Coca-Cola and Pepsi sales have dropped since the crisis hit, and what affects the soft-drink industry also affects the fast-food industry.

"McDonald's is recession-resistant, not recession-proof. No one can predict the future or speculate," said Schwartz.

"We will stay focused and leverage our strengths and advantages as a worldwide brand," he added.

McDonald's rival Yum Brands Inc, the operator of KFC, Taco Bell and Pizza Hut said it will cut several hundred jobs to restructure its US business. The company said its third-quarter US operating profit fell by 16 percent, due to rising food costs and lagging KFC sales.

McDonald's said surging commodity costs are challenging, but price increases in the restaurants are a last-ditch option.

"We have the ability to manage costs by economies of scale, good planning and good relationships with our suppliers," said Schwartz.

(China Daily January 5, 2009)