McDonald's in China

History

The first McDonald's in China was in Shenzhen in 1990, since then, the Western restaurant chain has been expanding steadily and successfully. Other than the home market - the United States - China is the No 1 growth market for McDonald's. In April 1992 they opened the world's largest McDonald's restaurant in Beijing. Compared with 1990, McDonald's menu in China has grown and includes foods tweaked for local tastes to satisfy consumers.

Presently there are more than 1,400 (2012) McDonald's stores in China with 1,800,000 (2013) employees.

Additional - China's evolution has driven three key trends:

∙ The rise of the domestic middle class;

∙ Rising wages and diminished cost advantages in manufacturing;

∙ The rapid development of domestic infrastructure.

These trends are creating long-term opportunities for U.S. companies.

Additional- POLICY STATEMENT

McDonald's will:

Purchase supplies from local producers wherever possible

providing they can meet McDonald's exacting product and hygiene

standards and are competitive.

Monitor suppliers in terms of their environmental, social, animal

welfare and agrochemical policies.

Only buy from suppliers who operate responsibly and humanely

and in accordance with government and EU regulations and

guidelines.

Work with suppliers to help them achieve even more exacting

quality and efficiency standards and to develop better methods of

production.

Develop long-term relations with key suppliers.

Settle suppliers' invoices promptly.

Communicate changes and development opportunities to

suppliers in areas which affect their work with McDonald's.

SLIDE 6

Shandong-based Liuhe Group Co, one of the largest chicken suppliers in China- their source for chicken

McKey Food Services the Shanghai-based China branch of OSI Group is the biggest McDonald's food supplier in the world.

Husi Food Co. Ltd. Function as the consolidator and distributor of virtually all of McDonald's inputs in China.

DC's located in 45 cities, mainly:

Chinato

Qianmen of Beijing

Shanghai

The Pearl River Delta

Map showing every one of the 173 Chinese cities with McDonalds 1,400 restaurants in 173 cities

SLIDE 9

Inbound transport

* Order optimization. Orders are optimized and grouped together across facilities to create multi-pick, single drop shipments. LTL loads from