Han Ximin

McDonald's China has introduced a promotional combination meal starting from 10 yuan (US$1.46) solely for the Shenzhen market, possibly using the move as a pilot project for its largest-ever price slash nationwide.

McDonald's entered China in 1990 by setting up its first outlet in Shenzhen.

At the company's news conference in Guangzhou on Wednesday, company officials announced they have cut some prices by as much as 33 percent and plan to open 175 restaurants in 2009 in China despite the global financial crisis.

"The marketing strategy in Shenzhen is a pilot and will probably be promoted in other markets in China," said Zhou Weicheng, vice president of McDonald's China and general manager of McDonald's southern China market.

Markets outside Shenzhen in China also introduced a promotional meal combination priced at 16.5 yuan. In what the company called "the best ever value meal combination," 50 percent of its products were now selling at the same or lower levels as 10 years ago.

Popular items with downsized prices include Filet-O-Fish, double cheeseburger, McNuggets, McPuff and the new Mala pork burger.

The price cut was done to stimulate consumption, enhance the company's price policy and benefit consumers as McDonald's had promised, according to Zhou.

The cuts will further heat up competition as a growing number of Chinese restaurants and shops are reducing prices in a bid to lure customers and seek chances to expand during the period of financial crisis.

Noodle King, a Chinese restaurant that has 50 outlets in Shenzhen, has since January offered coupons with which diners get 21 percent discounts.

Just hours after McDonald's announcement, Kung Fu Catering Management Co., a Chinese restaurant that has 65 outlets in Shenzhen, initiated a super meal promotion plan, in which customers get a 33 percent discount when buying a combination of three products. The promotion will last until March 17.

Yum! Brands Inc., a U.S. firm that operates KFC and Pizza Hut among others, announced Thursday it was very cautious in price adjustments and would take appropriate and corresponding measures focusing on the economy, cost changes and consumer demand. It has already handed out coupons and launched promotional activities to attracted consumers since the beginning of the year.

The company now has 60,000 employees working in its 1,065 restaurants. This year it will hire around 10,000 new staff for its 175 new restaurants. In Shenzhen, the comany will hire 1,200 new workers.