Colonel Sanders' March on China

It's lunchtime in Qiandaohu, a tiny fishing and tourist town deep in China's coastal Zhejiang province. While visitors are off exploring the famous local lake and its 1,000 green islands, residents hang out at the new KFC—the only fast-food restaurant in a place better known for its freshwater shrimp and fish. Hu Hongyi, a 30-year-old accountant, brings his wife and 10-month-old son to the eatery every three or four days. "I like the flavors and it's reasonably priced," he says. Local high school student Wang Hongting, another KFC habitué, says, "The food isn't cheap, but it's kind of fashionable." Indeed, during...

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