Why read this: This version gives students a full-length but controlled look at how a business-journalism argument is built. The topic — Western fast-food chains pushing into smaller Chinese cities — is concrete enough for learners to picture, but the argument structure (claim → reasons → risks) is the kind of extended expository writing they need for academic reading. It trusts learners with a real argument without the heaviest Economist-register vocabulary.
What to notice: Notice how each paragraph does one job. Paragraph 2 gives the plan. Paragraph 3 gives the first reason (too many stores in big cities). Paragraph 4 gives the second reason (new Chinese owners). Paragraph 5 gives the third reason (foreign investors are pulling back). Paragraphs 6, 7 and 8 give the risks. Also notice how the writer uses small signal words — suddenly, by contrast, still, at first glance — to show the reader where each paragraph is going.
Skills practised: Reading for paragraph function (reason-giving, counter-argument, example); using a concrete example (Hanchuan) as a window into a bigger story; reading numbers as evidence rather than decoration (3,000 + 7,000 outlets, 70% cannibalisation, 60%, three years); and parsing subordinate clauses introduced by which, while, where, that and although. Students should also practise spotting hedging signals (may, still, at first glance) that warn the reader a claim is less certain than it first sounds.
Why McDonald's and KFC are opening so many stores in small-town China
Western fast-food chains are pushing into the countryside — and it is not as easy as it looks
Tap any green word in the article to see its meaning.
On paper, Hanchuan is a city, but in reality it feels mostly rural. About a million people live in and around its fields and small factories, and a firm making sewing thread and a few fish farms do most of the work that drives the local economy. That is why it was a small event, earlier this year, when Hanchuan's first McDonald's opened in January and a steady queue formed at the door on the very first day.
Towns like Hanchuan used to be nowhere on the maps of big multinational companies, but now they are exactly where the big Western fast-food chains want to be. In the next three years McDonald's plans to add 3,000 new outlets in China, on top of the 7,000 it already had in 2025, while KFC wants to add more than 4,000 to its existing 12,600. Burger King, Domino's, Pizza Hut, Starbucks and Subway all have similar plans — and most of these new restaurants will not be in the biggest cities, but in smaller cities and towns like Hanchuan.
Why the rush into the countryside? The first reason is that the chains need new customers. About two-thirds of China's people live outside the country's 50 biggest cities, and those big cities are now full of burger and chicken shops. According to UBS, a bank, roughly 70% of KFCs in China already sit within a ten-minute cycle ride of another KFC. The figure for McDonald's is around 60%. In other words, too many of the chains' own stores are competing with each other — a problem known as cannibalisation. Finding people who have never eaten at these brands therefore matters a lot.
The second reason is less obvious: who actually owns the chains in China has changed. Although McDonald's and KFC are American brands, their Chinese businesses are now largely run by Chinese investors. McDonald's in China is mostly owned by Citic Capital, a powerful company. KFC and Pizza Hut are part of Yum China, which the American parent company in 2016. In November Starbucks sold 60% of its China business to a Chinese with ties to the government. Burger King signed a similar deal that same month.
This shift partly reflects a change in mood: foreign investors have cooled on China, the economy is slowing, consumers are careful with their money and local competition is strong. Many Western brands have stopped expanding, or are starting to shrink. Chinese investors, by contrast, are willing to put up the money, and they are betting that semi-rural China is the next big market for burgers and coffee.
It is still a gamble. Chinese fast-food brands such as Tastien and Wallace already offer similar food, are cheaper, and already have many shops in smaller cities. To compete, Western chains will have to keep their prices low. That is difficult, says Jay Lau of S&P Global, an information provider. They will also need to build new in places where they do not yet have any — which adds cost and reduces profit.
Finding the right places is also harder than it looks. At first glance, much of the countryside seems wide open: most small towns in Hubei province, where Hanchuan is located, have no McDonald's at all. But many of these towns have very small centres with few buildings that are big enough to hold a full-size fast-food restaurant, and competition for the few spaces that do exist will be intense.
Hanchuan shows what this means in practice. Its traditional open-air markets and older shopping streets were not right for McDonald's, which is careful about where it opens. The chain finally agreed to only after a small but modern shopping mall was built nearby. In many of the nearby towns no such mall exists yet, which means the fast-food giants still want to move in but may have to wait for the towns to change first.
On paper, Hanchuan is a city, but in reality it feels mostly rural. About a million people live in and around its fields and small factories, and a firm making sewing thread and a few fish farms do most of the work that drives the local economy. That is why it was a small event, earlier this year, when Hanchuan's first McDonald's opened in January and a steady queue formed at the door on the very first day.
Towns like Hanchuan used to be nowhere on the maps of big multinational companies, but now they are exactly where the big Western fast-food chains want to be. In the next three years McDonald's plans to add 3,000 new outlets in China, on top of the 7,000 it already had in 2025, while KFC wants to add more than 4,000 to its existing 12,600. Burger King, Domino's, Pizza Hut, Starbucks and Subway all have similar plans — and most of these new restaurants will not be in the biggest cities, but in smaller cities and towns like Hanchuan.
Why the rush into the countryside? The first reason is that the chains need new customers. About two-thirds of China's people live outside the country's 50 biggest cities, and those big cities are now full of burger and chicken shops. According to UBS, a bank, roughly 70% of KFCs in China already sit within a ten-minute cycle ride of another KFC. The figure for McDonald's is around 60%. In other words, too many of the chains' own stores are competing with each other — a problem known as cannibalisation. Finding people who have never eaten at these brands therefore matters a lot.
The second reason is less obvious: who actually owns the chains in China has changed. Although McDonald's and KFC are American brands, their Chinese businesses are now largely run by Chinese investors. McDonald's in China is mostly owned by Citic Capital, a powerful company. KFC and Pizza Hut are part of Yum China, which the American parent company in 2016. In November Starbucks sold 60% of its China business to a Chinese with ties to the government. Burger King signed a similar deal that same month.
This shift partly reflects a change in mood: foreign investors have cooled on China, the economy is slowing, consumers are careful with their money and local competition is strong. Many Western brands have stopped expanding, or are starting to shrink. Chinese investors, by contrast, are willing to put up the money, and they are betting that semi-rural China is the next big market for burgers and coffee.
It is still a gamble. Chinese fast-food brands such as Tastien and Wallace already offer similar food, are cheaper, and already have many shops in smaller cities. To compete, Western chains will have to keep their prices low. That is difficult, says Jay Lau of S&P Global, an information provider. They will also need to build new in places where they do not yet have any — which adds cost and reduces profit.
Finding the right places is also harder than it looks. At first glance, much of the countryside seems wide open: most small towns in Hubei province, where Hanchuan is located, have no McDonald's at all. But many of these towns have very small centres with few buildings that are big enough to hold a full-size fast-food restaurant, and competition for the few spaces that do exist will be intense.
Hanchuan shows what this means in practice. Its traditional open-air markets and older shopping streets were not right for McDonald's, which is careful about where it opens. The chain finally agreed to only after a small but modern shopping mall was built nearby. In many of the nearby towns no such mall exists yet, which means the fast-food giants still want to move in but may have to wait for the towns to change first.
Questions
Check your understanding
- 01
According to the article, why are McDonald's and KFC opening so many new restaurants in smaller Chinese cities?
- 02
The article says that about 70% of KFCs in China are within a ten-minute cycle of another KFC. Why does the author mention this number?
- 03
Why does the article call the rural expansion 'still a gamble' in paragraph 6?
- 04
The article says Chinese investors are now willing to pay for expansion while Western investors are not. Explain how this change might help the fast-food chains grow in small-town China — and one way it could cause problems for them. Use specific details from paragraphs 4 and 5.
Suggested length: ~80 words
- 05
The last paragraph says McDonald's only agreed to open in Hanchuan after a new shopping mall was built. Why does this example matter for the article's wider argument? Answer in your own words.
Suggested length: ~80 words
Questions
Check your understanding
- 01
According to the article, why are McDonald's and KFC opening so many new restaurants in smaller Chinese cities?
- 02
The article says that about 70% of KFCs in China are within a ten-minute cycle of another KFC. Why does the author mention this number?
- 03
Why does the article call the rural expansion 'still a gamble' in paragraph 6?
- 04
The article says Chinese investors are now willing to pay for expansion while Western investors are not. Explain how this change might help the fast-food chains grow in small-town China — and one way it could cause problems for them. Use specific details from paragraphs 4 and 5.
Suggested length: ~80 words
- 05
The last paragraph says McDonald's only agreed to open in Hanchuan after a new shopping mall was built. Why does this example matter for the article's wider argument? Answer in your own words.
Suggested length: ~80 words