UPDATE 1-McDonald's eye 500 stores in China in 3 yrs - exec

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By Fang Yan and Hongwei Li

SHANGHAI, Feb 18 (Reuters) - McDonald's Corp (MCD.N), the world's largest fast-food chain, is optimistic about business prospects in China and plans to open about 500 stores in the country in three years, a senior executive said on Wednesday.

McDonald's China operations have not been affected by the fallout from the global financial crisis which has hit consumer spending as it has taken steps to retain customers, Brian Durkin, vice president of development in China, said.

"McDonald's customers, when they go out shopping, they may not buy furniture or clothes, but they get hungry in the process," Durkin told Reuters on the sidelines of an industry forum.

"Many of our new initiatives, 24-hour delivery, special value meals, breakfast, all are driving and overcoming our sales relative to this decline," he said.

In what the company calls "the best-ever value meal combination" in China, McDonald's launched an aggressive promotion two weeks ago with half of its items priced at the same level as 10 years ago or even lower.

Popular items with a downsized price included Filet-O-Fish, Double Cheeseburger, McNuggets, McPuff and the new Mala Pork Burger.

Last week, the fast food giant posted a better-than-expected 7.1 percent rise in global January sales at restaurants open at least 13 months, supported by strength in nearly all its markets. Fast-food restaurants benefited as the global downturn sent diners to lower-priced fare.