New competition

Since 2001, the competition has been heating up again. Chinese fast food chains have been growing and accounted for 80 percent of the restaurant industry in 2007.

Many of the Chinese fast food chains have been updating and standardizing their systems. In September 2005, Lihua Fast Food invested 3 million yuan to establish its own factory in Nanjing, introducing an automatic production line which standardizes the taste of its the cooked rice. The company later built factories in Changzhou and Beijing.

Kungfu Catering, one of the largest Chinese fast food chains which opened its 200th store last year, announced last October it will be standardizing the operation of all its stores with the help of South China University of Technology to ensure that each food order is of the same quality and can be delivered in 80 seconds.

"The Chinese fast food industry is maturing, and standardization is the only way to compete with foreign fast food chains," says Li Yaguang, deputy secretary-general of China Cuisine Association.

It is still not easy to gain an edge as foreign competitors continue to expand aggressively.